Wednesday, May 1, 2013

Chambless in snow 1/4/13


Intellectuals and Community

17

Buffalo’s identity opportunity, again

When the late Wayne Chambless came to Buffalo in 1960 to study English literature, he was leaving the segregated South for one of the triumphantly progressive places of America. Buffalo was then the home of a great new public university. The already-renowned art gallery was being expanded. The great public library system—home to the most significant Mark Twain manuscripts, especially Chambless’s favorite, Huckleberry Finn—was just opening its new downtown headquarters. The old Normal School had blossomed into the State Teacher’s College, with many new structures and a magnificent library and art collection of its own.
The Saint Lawrence Seaway had recently opened, and hopes were still high that it would make of Buffalo a bigger port connecting Europe to the Great Lakes interior. Bethlehem Steel had expanded and would again. Bell Aerosystems was testing promising technologies as diverse as hovercraft and rocket-packs.
And intellectuals and intellectuals-in-training were being drawn here from places too broken to house them, including the American South and post-revolutionary Hungary, but also from world capitols, too. It was in the early and mid 1960s when the great flowering of Buffalo as an international center of science, technology, music, literature, and fine arts occurred with the inputs of many transients but also from people who came and stayed. It was also then that Ralph Wilson’s football franchise made of Buffalo a major league city, as would the National Hockey League expansion almost a decade later.
One of the important features of the Buffalo landscape was an obscure private school founded by emigres and initially supported by them. The Calasanctius Preparatory School was a hard-to-categorize place: not a “blue jacket” prep school, neither was it a diocesan Catholic school, though it was organized, run, and largely staffed by priests. It was founded the year Sputnik went up. Its focus on academic rigor embodied one strand of the new zeitgeist that Buffalo-born historian Richard Hofstadter described in his Anti-intellectualism in America—namely, a new willingness to embrace learning, academic rigor, inquiry, or simply sheer brain-power as assets rather than detriments for the new age.

Intertwined fates

The promise that was Buffalo in 1960 was never quite fulfilled largely because a new, finance-centered version of capitalism stripped the regional economy of heavy industry, even while local elites’ antipathy and indifference to the then-new State University thwarted well-reasoned efforts to make of SUNY the next industrial center.
Buffalo was a good place to be after the Soviet Union’s rocket scientists successfully launched Sputnik in 1957. Some significant pieces of the defense industry still remained here, even after the airplane factories left due to labor actions and organized crime problems. A major New York State commitment to a new university center here had transformed the small but well-regarded University of Buffalo into a version of a Big 10 or PAC 10 land-grant university.
But there was a critical tension here, just like everywhere else in America: between intellectuals and the business class. Historian and John F. Kennedy speechwriter Arthur Schlesinger, Jr.’s observed that “Anti-intellectualism…has long been the anti-Semitism of the businessman.” In Buffalo, anti-Semitism was a critical factor in keeping town and gown from melding.
The large presence of New York City kids at the now-public UB gave the Buffalo vernacular epithet “Jew B” a widely accepted descriptor even as it drove a wedge. The town and the gown went their separate ways, spatially and spiritually. Late UB President Bill Greiner and his former UB Law School colleague Tom Hedrick wrote a little book about how UB had never had a chance at becoming the centrally located urban university that has been the norm of successful cities for about the past 800 years or so. Informal historians recite the allegedly notorious anti-Semitism of a former leader of a daily newspaper, and the anti-intellectualism of at least one scion of a great Buffalo commercial fortune, as key determinants of siting the fourth of New York State’s university centers in Amherst, rather than next to the old central business district.
The university’s cultural divide from the business elite was strange here, given the Buffalo business elite’s simultaneous devotion to contemporary art and to new orchestral music. And in the early 1960s, until the university actually moved to Amherst starting in the mid- and late-1970s, it was the city, especially the Elmwood Avenue corridor and Parkside that was the home of region’s university culture and community.
Many famous intellectuals, including Jacques Derrida and Michel Foucault, writers like Dwight MacDonald, John Barth, Leslie Fiedler, Lionel Abel, Raymond Federman, even Allen Ginsburg, plus musicians and filmmakers and painters, both hosted and showed up at parties west of Main Street. Ditto the many scientists attracted by state money to conduct research and practice medicine here. Graduate students liked the cheap housing on the West Side, and mingled with locals in the Allentown and Elmwood bars. Young faculty from New York, Boston, Philadelphia, Chicago, and other large cities liked the density of their peers in that part of town. And for the more mature European and Asian faculty, whether refugees or happy immigrants, the question was often enough simply this: Where can we send our children to school? For decades, the answer was Calasanctius.
Faculty brats were the core of the student body of Calasanctius. Volunteers and part-timers from UB and from Roswell Park did a lot of teaching, which encouraged more faculty support and engagement. The school admitted girls long before the private schools did, and was co-educational while the elite Catholic schools remain gender-segregated. Educated people wanted faculty credentialed like them, and rigorous like them. Wayne Chambless was the main American among the largely European faculty at the school. He dressed likeEsquire, drawled like Faulkner, quipped like Mencken, smoked like Lucifer, and graded the way Bela Karolyi coached Nadia Comaneci: as if nothing short of utter mastery was expected because, with focus and discipline, mastery was indeed achievable. His students went Ivy not because their blueblood parents or grandparents paid the way but because their high-achieving parents got help from the unapologetic intellectuals who worked their adolescents’ butts off.
But when the Milliken decision came down from the US Supreme Court in 1974, and Judge Curtin’s Buffalo desegregation decision followed in 1976, and the magnet school system was cobbled together in an effort to give Buffalo’s middle class a plausible rationale for staying rather than fleeing to the suburbs, Calasanctius was dealt a blow. Faculty parents wouldn’t have to pay tuition at a public school. When City Honors was formed, Calasanctius lost its core constituency. The school’s census gradually dwindled. The founder generation passed on and was replaced by well-meaning, traditional prep school managers who didn’t comprehend the ethos of academic rigor that was plausible during the Kennedy New Frontier years.

Cycles of history

Now the old American pendulum has swung, a bit, again: A lecturer in (if not a professor of) constitutional law is in the White House, and Buffalo’s business class makes money from, and hopes to make even more money from, the State University.
But the world is much changed from 1960: The steelmakers are long gone, the second floor of the downtown library is closed, the defense industry has largely left the region, the polyglot slice of Habsburg Galicia or Krakow that was old Richard Hofstadter’s boyhood Broadway-Fillmore is reduced to the two congregations and two springtime holidays.
The Bills are still here, though, and at the moment—again—the public investment in spectator sports remains untouchable, overshadowing public support for the arts and for cultural institutions.
Unionized teachers are under bipartisan political assault even as City Honors, the functional successor to Calasanctius, motors along. Like Calasanctius students from the 1950s to its closing in 1991, many City Honors grads succeed brilliantly. They go to highly competitive colleges and graduate schools, and just like their Calasanctius predecessors, most don’t return. It is a matter of family economics: Unlike the elite private and parochial school networks, there were few if any Calasanctius family auto businesses, manufacturing companies, department stores, or other enduring structures of the business class. Faculty are salarymen. Physicians and attorneys rarely offer their progeny any employment opportunities. Calasanctius educated Buffalo children who went on to become inventors, academicians, corporate executives, attorneys, physicians, and what-all, elsewhere. This is again the case with City Honors, many of whose students come from even less well-heeled homes. Without mentioning either school by name, Harvard economist Ed Glaeser makes this point about the paradox of great educational institutions in failing cities: educational success benefits the nation, but not often the homefolks.
Until the students have a draw to bring them home, it is the teachers who keep the ecology going. Economists who appreciate the enduring relevance of what they call the “agglomeration effect,” which is all about the uncanny power of clustering diverse enterprises, talents, tastes, and demands in small spaces, note the resilience of cities where the students, faculty, support staff, and hangers-on of universities are ever present to refresh and reinvigorate the host community. It is a matter of physical adjacency: Proponents of the medical corridor are absolutely correct about that much—but while there is plenty of talk about building a brand-new stadium for the Buffalo Bills downtown, there is zero talk about using the Buffalo billion to put the entire university downtown. In the Rust Belt university towns Pittsburgh, Cleveland, Chicago, Detroit, Rochester, Syracuse, and Milwaukee, where there are downtown campuses, the town and the gown overlap much more creatively, with much greater economic impact. Population stabilization has been achieved in Rochester and Pittsburgh; further population erosion is forestalled where universities are sited. In Buffalo, population continues to nosedive. The numbers for the region are also negative: Erie County will dip below 900,000 by 2020, the year that the Buffalo Bills have the option to leave.
But because Buffalo was once a national and international draw for intellectuals, back in the days when our University was reinvigorated with Southerners, New Yorkers, refugees, scientists, and artists, their presence reinforced a progressive community identity. Our intellectuals were once neighborhood figures, which is a way of saying that they were part of the self-reinforcing context of the community. There was once a well-dressed, persistently drawling expert on inculcating literary precision in unruly teenagers, a teacher who often explained that Buffalo was his true home, not burgeoning, low-tax Tennessee, because here, unlike there, literacy, critical intelligence, and sexual tolerance were actually respected. May it ever be so.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or at www.sunypress.edu.

Restoration blues 1/10/13


Law's Empire

4
Senator Elizabeth Warren of Massachusetts slammed insurance giant AIG for considering joining a lawsuit that claims the terms of the company's federal bailout were unfair.

Why we need the old order back—before another financial bubble bursts

The best argument for the American rule of law, however imperfect it has been, is that we Americans eventually get it right. President Obama paraphrases Martin Luther King, Jr., when he says that the arc of history bends toward justice. But with a new credit bubble looming, and the same old Wall Street bankers defying new rules enacted to rein them in, and other pin-striped thieves enjoying not just regulatory leniency but also the political support of ranting yahoo Tea Party Republicans, justice seems far less than inevitable.
Sometimes law isn’t much of a remedy. M&T Bank, whose boss swore up and down that neither he nor his outfit would ever do such a thing, stalked off with more than $250 million in a deal that they cooked up with the all-powerful Goldman Sachs a couple of years ago at the height of the craze for creating mortgage-backed securities. $250 million sounds like chump change at a time when just one of the big Wall Street banks is on track to profit $6 billion just this quarter alone. But back in the day, just five years ago, the Buffalo guys bundled up 6,000 or so very shaky mortgages (many of them written here in Buffalo) and then sold them to a big insurance company in New York. This meant that our local bank had to look past the inconvenient truth that it knew it was peddling garbage as if it were gold. Here’s what our legal system said when the insurance company found out that what it had bought was garbage: A New York judge said, in effect, you should have known better than to trust those guys.
Now it seems that Goldman Sachs all by itself is up to its old tricks again. The law, as enacted by our elected representatives in Congress, got changed in 2010, when Congress worked with President Obama to stop the once-banned practice of banks gambling their clients’ money. Bloomberg News reported this week that the CEO of Goldman Sachs did not tell the truth when he swore up and down that neither he nor his outfit would ever engage in “proprietary trading,” which is allegedly banned by the new Volker Rule of the much-heralded Dodd-Frank Act. The journalists at Bloomberg named some of the names of the 20 or so Ivy League grads whose daily bread comes from doing what the boss says they don’t and what the law says they shouldn’t.

Bubble ahead, bubble behind

The Dodd-Frank bill is more than 800 pages long. Back in 1934, in the aftermath of the last huge credit-bubble crash, Congress enacted the 35-page Glass-Steagall Act, where the lines were laid down brightly. From 1934 until 1999, until a former Goldman Sachs CEO, Robert Rubin, became secretary of the treasury and convinced everybody in town to repeal Glass-Steagall, it was illegal, plain and simple, for banks to gamble on Wall Street. It was so simple. Now it’s not so simple. And the new law means “yes” when it says “no” because there’s a brand-new nuance to “no.”
But locally, and nationally, bubbles are forming again. The local news is that housing prices are up an enormous amount—a 13 percent increase in median sale price just in the past year, here in a market that has four or five times as many new houses being built as there are new households to buy them. Wages are not rising 13 percent a year, that’s for damned sure: Wages are stagnant in nominal dollars, and actually declining in real purchasing power. What’s happening is that some assets are swelling in value—the assets that banks like to lend against. The old problem of 10 years ago is back, and back in a major way.
Everybody in the world of high financial capital is seeking high yields because interest rates are being kept so incredibly low. There is no point to saving: Your savings account at your local bank or credit union is yielding you less than one half of one percent interest on your deposits, and that’s true of everybody, large and small. That leaves some people—specifically, old people—reliant on their monthly pension payments, and not on their interest on savings, to keep them in the realm of consumers. The people who manage the pension funds that have to pay out money to those old folks have to come up with the money somehow, so those fund managers have to hope that stocks go up in value—or, in the alternative, that other things go up in value, things that can be leveraged, i.e., borrowed against.
Therein lies the problem: There is a new round of debt-leveraging underway. Debt is exploding again. And now, one of the people who warned about the first debt bubble is warning that we are looking at another one.

Hudson’s alarms

Michael Hudson, the senior voice of a group of economists that is far outside the Goldman Sachs-led world of compromised academia and revolving-door Washington officialdom, is warning that the same guys who pumped up the housing bubble in the first decade of the 21st century are pumping up a bond bubble that will pop in the second decade.
Here’s why people should sit up and listen when Michael Hudson talks: He called it right the first time. Hudson writes voluminously. His website (michael-hudson.com) is full of extraordinarily long essays. Mixed in amongst them are a few easy-to-understand expositions, such as the very nicely illustrated article forHarper’s Magazine in May 2006 that explained, with pictures and brief paragraphs, exactly how the housing bubble would pop, and what its popping would do to everybody. Hudson was prescient, correct, understandable—and his warning was completely ignored by Washington.
Now Hudson is at it again. He is warning that the major banks, unconstrained by effective regulation as they were in the olden days of just a dozen years ago, are leading the way to turning working people all over the world into debt slaves. We didn’t experience it in Buffalo because of the peculiar dynamics of this region, but in many other places in the US, the run-up in the cost of houses turned millions of people into slaves to their mortgages—which suddenly, in 2008 and 2009, became loans on houses that were worth less than people had borrowed to buy them.
But this time around, there are a couple of pieces of good news. You may believe that when President Obama succeeded in raising tax rates on high-income households, including capital gains tax rates, that it was all about politics. Wrong. It is actually good news for the overall economy that the people who have captured well over 93 percent (UC Berkeley economist Emmanuel Saez’s estimate) of all the income gains since 2008 are going to be paying slightly more in taxes because their consumption won’t change, but more of the burden of all the government debt that was racked up during the Bush era will be their burden to bear.
The other piece of good news is that corporate executives—not the bankers or the speculators or the hedge-fund managers—are gaining something that sounds awfully like class consciousness, in that they are beginning to understand that their interests as salarymen are different from the interest of the aforementioned. People whose jobs are tied to stock-price performance actually are unlike the rentier class. And the rumor is, from at least one Republican consultant, that these business people have figured out that the Congressional Tea Party is a threat to economic recovery.
That still leaves us with a political establishment that has not yet been capable of restoring the rule of law. Banks that defrauded hundreds of thousands of customers get wrist-slapped. Banks that launder money pay fines and chug along. Banks that knowingly peddle bad paper skate. And their CEOs remain unbelievable. At least the US Senate now has a law-maker, in the person of Elizabeth Warren, who understands the potential majesty of the law, especially in matters of money.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or at www.sunypress.edu.

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Blue 1/24/13


Water and Wealth

3

How a new clean-water alliance may reshape politics

Earlier this month, Harvard political scientist Theda Skocpol published a study that Barack Obama’s consultants must have read before he delivered his second inaugural address. Environmentalists, and humanity in general, should be glad that the re-elected Obama and his team decided that 2013 is a safe, politic, and opportune time for him to talk about anthropogenic climate change, nutso weather, and alternative energy sources.
Professor Skocpol’s thesis is that it was environmentalists, not Obama, whose politics failed to deliver bipartisan support for the environmental goals that enjoy overwhelming public support. Now, with the president boldly recommitted to changing American energy and environmental policy, environmentalists have another chance—mainly because the president’s team of demonstrably competent operatives can take advantage of the political opportunity that Skocpol blames the elitist, conference-loving, narcissistic, and politically incompetent enviro-schmoozers for having squandered.
It happens that we in the Great Lakes region may soon be at the center of the coming political storm. Our governors and Congressional delegations should get ready for the political economy of water to be the focus. Today, the Washington media are focused on the Republican Party talking points of the debt ceiling and spending. But soon enough, the creeping disaster of another year of widespread drought will become more and more visible in the daily news. The cameras could well turn away from talking heads bloviating about budgets to moving pictures of withered crops, dry rivers, shrinking lakes, and stranded boats.

A dose of reality

On January 16, Agriculture Secretary Tom Vilsack declared 634 counties disaster areas because of persistent drought. All the counties of Oklahoma, most counties in Texas, and all the counties of Kansas were declared disaster areas eligible for federal disaster assistance.
These Red States voted overwhelmingly for the climate-science denialism of the Republican national ticket. Consistent with that Tea Party approach to reality, not a single Republican member of the House of Representatives from Kansas voted in favor of Hurricane Sandy disaster relief for New York and New Jersey. But in a circumstance that will enable rather than challenge cognitive dissonance, these same members of Congress will soon be delivering emergency federal disaster aid to their constituents becase the USDA’s drought programs are funded, as-of-right programs, not special aid that has to be voted on.
But as the seasons progress, the need for disaster assistance will grow because winter isn’t acting like winter. This is the time of year when drought is normally not an issue because almost everywhere in the continental US, winter is the season of precipitation—the restorative rains and snows that collect in the high country, replenish the underground aquifers of the flatlands, and bring the rivers back up to the level our country’s extensive barge and freighter shipping systems use.
None of that is happening this winter. The National Oceanic and Atmospheric Administration drought-monitor projects that last year’s weather pattern will repeat: Last year, USDA designated 2,245 counties in 39 states as disaster areas due to drought. That amounted to 71 percent of the land area of the United States.
Not a single county near any of the five Great Lakes, however, was so designated.
The Blue States have water, the Red States are going without. Properly managed, that’s a reality that will become a political fact even more powerful than Tea Party ideation.

Locals to the rescue?

Professor Skocpol’s paper is provocative principally because she doesn’t believe that the Washington environmental elites get it. They still mainly want to pursue a pro-business, inside-the-Beltway strategy to achieve climate-change legislation, despite that strategy having failed utterly during Obama’s first term.
A section of her paper is entitled “Yearning for an easy way,” and the gist is this: Elite enviromentalists haven’t a clue about how to connect with voters. They were comfortable investing hundreds of millions of dollars in pollsters, focus groups, advertising copywriters, and TV ad-placements that didn’t deliver any Republican House or Senate votes for legislation that would have capped greenhouse gas emissions and set up a market for greenhouse gas permits, the so-called cap-and-trade bill.
Why did they fail? Skocpol says that the enviros ignored the demise of moderate Republicans, who are now constrained by Tea Party discourse and threatened with primary campaigns from the far Right. She recounts the takeover of think tanks by the forces that move rural and suburban Republicans: oil companies, pro-oil political action committees, Fox News, and the right-wing echo chamber of Rush Limbaugh and his epigones in every American media market. Republican political handlers everywhere, including right here in Paladino Country, succeed by crafting sharply anti-government, anti-green, anti-science messages that work particularly well with alienated, moderate-income white voters, especially men who lack a college degree.
Sensible policies that work elsewhere—like a carbon tax, which is bolstering the economy of British Columbia in Canada—actually enjoy bipartisan ideological support among think tankers, but because House Speaker John Boehner is still beholden to the denialist Tea Party caucus, it is a dead letter. Still, Skocpol points out, the leading enviros keep searching for nonexistent Republican moderates.
But now will come the new reality, and with it, the media stories. There will be pictures of water-starved crops and dry rivers. Unfortunately, in some of the Red States, there may be Dust Bowl conditions. The experiences of farmers without crops will be much tougher for pro-oil consultants and climate-science deniers to spin. In a nation where almost 700 counties are in severe drought in January, it would seem that such a wide experience of water shortages could become relevant to politics.
But that would mean that environmentalists would have to make contact with actual Americans who are culturally different from them. Skocpol is not alone in doubting whether national environmentalists will be able to connect the political dots. “Environmental organizations are investing way too much money in polling operations, and spending too much time imaging which phrases they should use in messaging campaigns disconnected from organized networks,” she writes.
But local and regional environmentalism has also become compromised and elitist—even though there is unquestionably broad public support for decisive government action to protect water, switch to green energy, and move forcefully to address climate change.
What to do? A modest proposal: Connect with people who go fishing, especially the moderate-inome, alienated, modestly educated white males who actually understand that clean water matters. Another thought: Resurrect a late-blooming first-term legislative proposal known as cap-and-dividend.

A policy bridge

In 2010, Maine Republican Susan Collins and Washington Democrat Maria Cantwell introduced the Carbon Limits and Energy for America’s Renewal, or CLEAR, bill in the US Senate. Like cap-and-trade, this cap-and-dividend aims to raise the price of carbon-based energy production and use—but the revenues that are raised from a tax or sales of permits are put into a public trust fund, with the proceeds divided up and mailed out as dividend checks to every individual citizen, something like the State of Alaska does for its residents from its oil permit fund. This CLEAR legislation would remit about $1,100 per family of four, a.k.a. the people enviros somewhat disparagingly refer to as “everyday Americans.”
The CLEAR bill sounds like the kind of deal that Barack Obama’s campaign team could sell with its grassroots networks—in part because an actual cash incentive that arrives in family exchequers could address the income inequality that was also part of Obama’s second inagural speech.
As the recent history of environmentalism and “shrinking cities” advocacy shows, there is a whole lot of money to be made from foundations—lots of conferences to go to, lots of junkets to take, lots of cocktail parties to enjoy after one finishes yet another round of presentations that sound exactly like last year’s. (The leading land-bank advocacy group in Washington spent more than $2 million on consultants last year—the same consultants who in 2012 produced books and articles that read like photocopies of the books and articles they wrote five years ago.) The great news for folks who live their lives beyond those charmed circles is that the competence of a winning political campaign team may get invested in actually winning a policy battle instead of talking about it some more. That’s what one should like about politics when a candidate is invested in an issue. There’s a decision date and a deliverable.
People in the Great Lakes states, where we not only have the water that the rest of America needs but also the political sense to support Obama, should be especially glad that this president made the connection between climate change, green energy, and income inequality. If he’s tasking his team to work on it, the chances of forward progress are better than ever.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or at www.sunypress.edu.

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Herculean 1/31/13


The Five Labors of Buffalo

4

Myths, money, and heroes

Rob Ford, the aggressively anti-tax, anti-government mayor of Toronto, is proof positive that size, sophistication, prosperity, and even a world-class reputation for good regional governance can’t prevent frustrated voters from making choices they come to regret.
Elected in 2010, Ford’s policy blunders, including an attempted end-run around a very successful waterfront planning process that had steered away from Ford’s developer buddies, made his temporary mandate largely evaporate by 2012. Then, a court told him that an ethics issue was so serious that he would have to vacate his office. An appeals court judge last week overruled that finding, and now Ford gets to hold on until 2014, when he says he’ll run again.
Meanwhile, though, the real news from Toronto, as ever, is economic. The Greater Toronto Area continues to grow, attract immigrants, and put so much more gold into the Golden Horseshoe—there are at least 50,000 residents of Hamilton who commute to Toronto every day—that the central bank and the big private banks alike scramble in tandem to control inflation, in part by keeping a lid on housing debt, without stifling the growth.
Growth is happening in New York City, too. The population of the greater New York metro area is growing, but so is the City itself. Formerly no-go areas of the South Bronx and Brooklyn are filling with development. Immigrants of every hue and background stream in. The Census, the Cornell Program in Applied Demographics, and a team at the Wharton School all predict population growth in the New York metro area over the next decade, including in each of the five boroughs.
Buffalo, of course, is different. The Buffalo metro area will continue to lose population, as will the metros of Rochester, Syracuse, Cleveland, Detroit, and Pittsburgh.

Mirror time

New York City voters will choose a new mayor this year. So will Buffalo voters. Mike Bloomberg is term-limited; Byron Brown is not. But the truly influential political actors in places like the Province of Ontario and the State of New York are not the short-term executives in the office of mayor, but rather the provincial premiers and the state governors. And in both places, it’s not the politicians. It’s the big urban economies that are the real decision-makers.
Toronto towers over every other Ontario city, but New York City dwarfs everything else in New York State. Because of our unique history and location, Buffalo sometimes looks north before we look east; proximity means that it’s more likely we’ll catch a Shaw Festival play or take a visiting relative to see the Butterfly Conservancy before we’ll refinance the house and drive seven hours to see a Broadway show. Our isolation from the undisputed cultural, economic, and political center of New York State is real: We are 400 miles from Times Square. Montreal, Quebec, is actually closer to Manhattan than we are. Portland, Maine is closer. Even the capitol of the Confederacy in Richmond, Virginia, is closer.
But it’s not Toronto that’s giving this community an extra $1 billion more of its money, over and above the $1 billion we already get in excess of what we contribute to New York State. It’s New York, the city and its metro area, using the pass-through entity called New York State government. The question this community has had a very hard time asking itself is this: When are we going to understand our dependency, and recognize that it’s not anti-government messaging that catapulted Toronto ahead of Buffalo within the lifetimes of most Buffalonians, but Toronto’s having become less like Buffalo and more like New York City?
And when, oh when, are we going to stop whining about New York and start trying to emulate it?

Five big tasks

The Buffalo Billion has brought forth numerous rent-seekers (the term economists use for people who look for a special government favor or monopoly), each with a more glamorous-sounding plan than the last one. Check the websites of the Brownfield Opportunity Area, the Erie Canal Harbor Development Corporation, or the fan-sites that are touting a new waterfront stadium-exhibition-entertainment complex, and scroll through millions of dollars’ worth of pretty pictures of how to burn through even more public money in pursuit of toys, playthings, and games. You have already paid for most of that eye-wash, courtesy of Empire State Development Corporation and its reliable stable of eyewash-producers.
The tough reality is that Cleveland, with its new arena, its new baseball stadium, its new casino, its waterfront development including the Rock and Roll Hall of Fame, is fading. Cleveland and its metro will continue to shrink rapidly. The tough reality is that Pittsburgh, even with its new stadiums, its centrally located trio of universities, its highly regarded entrepreneurship and successful startup-incubating programs, will continue to shrink—but not as fast as it used to, not as fast a Cleveland or Buffalo or the other Upstate metros.
Getting to the point of having a big-enough regional government in the core of your metro area, the way that Toronto and New York do, is evidently a task beyond any hero. But there are five big challenges that all the Rust Belt metros have had a hard time facing up to are like the labors of Hercules: not quite impossible, but achievable, if one happens to be blessed with the assistance of gods like Hermes and Athena. It also helps to have a Herculean combination of strength, intelligence, persistence, and guile.

Task 1

We have to clean out our Augean stables, but not the way Hercules did it: He diverted a river to wash to crap out of the barnyard; we’ve got to wash the barnyard out of our streams. Organized labor in Buffalo is at least aware of the need for a major clean-water infrastructure commitment. A progressive county executive in Syracuse won a national award for doing a regional approach to cleaning up combined-sewer overflow, and has public buy-in for cleanup there. In Buffalo, Riverkeeper is investing more of its reputation in a generalized blue-water campaign, up from a focus on some limited dredging in the Buffalo River—but clean water, a true regional comparative advantage, is precisely nowhere in the economic development lexicon of the state, the regional advisory council, or any elected official.

Task 2

Rescue the poor kids. This shouldn’t be as hard as defeating Cerberus the three-headed dog, but there is zero chance of the Buffalo (Cleveland, Syracuse, etc.) region stopping its slide if kids are segregated by income in school as well as at home. Hamilton, Ontario, is working to follow the example of Raleigh-Durham, with its county-wide school district where no school building has more than four kids eligible for free lunch out of every 10 students. In New York State, Buffalo got a $1 billion check to rebuild the buildings, but not a nickel to regionalize, integrate, mix, or connect kids. The three-headed dog of suburban isolationism, urban isolationism, and administrative triplication wins.

Task 3

Do the homework. There is no public or private university in the Buffalo metro area that made the list of the 100 winners of competitive grants given by the National Institutes of Health or the National Science Foundation, nor is there a Buffalo metro area public or private university with a Nobel Prize winner. This nation’s and the world’s top research institutions support researchers who win peer-reviewed competitions for grants. Hermes, Athena—we need a little help here. Cornell University, the University of Rochester, Columbia, Yeshiva, NYU, Mount Sinai, Sloan-Kettering, Weill, Stony Brook, Rockefeller—all of these are New York State universities and medical schools, all in the top 100 of National Institute of Health grantees, none of them in the 716 area code. The University of Rochester’s engineering faculty alone win more grants worth more money than the entire State University of New York at Buffalo enterprise does.

Task 4

Get out ahead on energy. On the way to get the golden apples of the Hesperides, Hercules helped free poor Prometheus from the daily assault of the eagle the gods had set on him because he’d stolen the secret of fire. We don’t have to steal it, as we have the secret here: hydropower, wind power, and the state’s new commitment to solar power. The region that seeks to regain some reputation for energy should build on its history (Buffalo was the first electrified city, thanks to Niagara Falls), and make an all-out public commitment to renewable, carbon-free energy. Why not a fully electrified public transportation system, powered by regional resources? Would it really cost much of the Buffalo Billion to install solar panels on every public structure, and feed the grid rather than feed from it? Enterprising graduate students take note: We will find support for the numerate scholar who does the analysis to get an MA in applied economics.

Task 5

Recapture regional agriculture. The eyes tend to glaze over at this, but some very wise people have begun to do some integrated thinking about energy sources, arable land, rainfall patterns, and transportation networks. It happens that the Buffalo region is blessed with more hours of sun than any other place in New York State, situated at the very logistical hub that enabled New York City to become the great eastern port for inner North America’s harvests, and expected to continue to receive consistent rainfall while much of the rest of the US suffers both drought and weird weather extremes. There may be more logical Upstate sites for intensive, high value-added agriculture on an industrial scale, but Buffalo is such a site, too. This week, a conference in Linkoping, Sweden, is exploring the new nexus of “vertical” greenhousing and energy-efficient, industrial-scale agriculture in urban settings that are adjacent to fresh water. The Swedish government used to invest in automobile exports. Now it invests in urban agriculture and designs systems for places like Buffalo.
These are the labors that every Rust Belt city should set itself to. These are labors to undertake within, because merely taking delivery of massive amounts of any kind of outside aid doesn’t seem to be what works to transform regional economies. Checking the list of grant-getting scientists and research hospitals and universities, both Cleveland and Pittsburgh score impressively, with hundreds of millions of dollars of annual victories —but those regional economies are as undermined as Buffalo’s by suburban sprawl, administrative fracturing, and the spatial isolation of poor children in city-only school districts. The Toronto and New York examples—of regional governance and highly dense development—are lost on Cleveland, Pittsburgh, Buffalo, Syracuse, Rochester…
But of all those places looking for a leg up, only the Buffalo metro has not only its current annual subsidy but an additional year’s worth of free money. Golden apples indeed—and we didn’t even have to steal them. Lacking a local Hercules, it’s nevertheless raining gold here.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or at www.sunypress.edu.

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CasiNO 2/14/13


The Price of Free Money

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Proposed image of a casino at the redeveloped Metro Toronto Convention Centre.

The sure bet that no casino choice will work as planned

Knowledgeable Canadian observers expect that Toronto will soon get a casino—if not downtown, then somewhere in the Greater Toronto Area, because the career civil servants who run the lottery and gambling agency for the Province of Ontario have convinced a lot of people that a big, government-owned casino will be a revenue bonanza.
Forty miles closer to Buffalo, the increasingly self-aware, incrementally progressing Rust Belt city of Hamilton, however, will probably not go for a casino. In Hamilton, a broad coalition of activists, editorialists, and public-health experts have joined with the business community to ask local elected officials to vote it down for their downtown.
The Ontario casino conversation is underway in the college town of Kingston, way east near the St. Lawrence River, and in the near-north city of Barrie. The casino discussion in Hamilton features big red signs that say “No” and flashy videos promising an elegant hotel and high-paying jobs, debates pitting former mayors against other former mayors, and a Toronto guy who has been trying to sell his big boat, which now holds a restaurant, but who will convert it to a floating casino if anybody wants. The provincial government itself has been running ads promoting a casino.
The parallels with New York State government’s casino choices are remarkable: Governments want the revenue, but after a decade of casino proliferation all over North America, citizens and leaders are questioning the extravagant promises casino developers usually succeeded with a decade ago. Evidence is mounting that casinos in anyplace that isn’t either a megalopolis or a resort town fail to generate new economic activity simply because their clientele is mainly local.

Cuomo’s dilemma

Governor Andrew Cuomo has been making the case that New Yorkers spend their gambling dollars elsewhere, and the issue is not whether gambling casinos will keep getting their money, but whether New York State will see any piece of that money.
Indian casinos operate in Connecticut and commercial casinos in New Jersey, right next to the New York City metro area. New Yorkers help enrich the Mashantucket Pequots and the Mohegans at Foxwoods and Mohegan Sun, which yield hundreds of millions in revenue to the State of Connecticut. The state’s dependence on that money is a problem, and their problem will get worse should New Yorkers stay home to gamble. Since a high of $430 million in 2007, the comptroller of that state says that the revenue numbers are going to continue to shrink to around $300 million by 2015. The story is the same in New Jersey, where commercial outfits run casinos. Overall spending at casinos was $5.2 billion in 2006, but only $3 billion in 2012. Everybody points to the twin disasters—the 2008 financial crash and Hurricane Sandy—but also admits that new casinos in Pennsylvania, Rhode Island, and Massachusetts, and potentially in New York mean that fewer out-of-town customers can be expected.
If New York State puts state-owned casinos in the Catskills, in the New York metro area, and Upstate, the revenue bounty will be real for this state. But the novelty of easily accessible gambling is wearing off.

Indian and non-Indian casinos

Scholars at the National Bureau of Economic Research recently examined a different issue: whether Native American communities have benefited from casinos. William Evans and Julie Topoleski answer in the affirmative. Indian-owned casinos have result in “young adults moving back to reservations, fueling an 11.5 percent population increase; adult employment increasing by 26 percent; and a 14 percent decline in the number of working poor,” they found.
But Douglas Walker, one of the academic investigators who has done dozens of studies of various aspects of casino economics, summarized his own and others’ findings, including this: There is a negative economic reality to casinos. “The casino industry may partially or entirely ‘cannibalize’ other industries,” he writes. Anybody who has walked the area around the Detroit casino has witnessed first-hand the Niagara Falls phenomenon: There may be some redevelopment happening nearby, but there isn’t much of it. Detroit’s overall demographic collapse, like the ongoing shrinkage in Buffalo, Niagara Falls, and other cities where casinos exist, demands the question: Isn’t a locals-only casino just another way of taxing local residents?
That leaves New York State government with the same dilemma other governments have: Either get into the business with state-owned, privately managed casino operations, or to do like Connecticut does, and accept a piece of the Native American casino action.
Some citizens have an answer to that dilemma: Don’t do either. Citizens for a Better Buffalo recently held an event at the Pierce Arrow Museum at which participants in the ongoing lawsuit against the United States government reiterated their hope that Federal Judge William Skretny will once again find that the existing Seneca Gaming Corporation casino on Michigan Street is illegal and should be shut down. Meanwhile, however, construction continues on a larger casino building than the one currently operating.
The State of New York is in arbitration with the Senecas over past-due revenues that the Senecas have been withholding from Niagara Falls, Buffalo, and the state because, the Senecas argue, Albany violated the terms of the 2002 gaming compact by allowing “racinos”—horse-racing tracks with slot machines—to operate in Batavia and Hamburg, which are inside the geography that the compact deemed the Senecas’ exclusive gambling marketplace. The state would seem to be in a very strong bargaining position, though: Not only is there legislative momentum for legalizing casino gambling throughout New York, but that compact will have to be renewed because it expires in 2016. People familiar with the Seneca position argue, however, that as long as the federal government says that the Senecas can operate casinos on non-reservation land in Niagara Falls and Buffalo, the Senecas will operate casinos in Niagara Falls and Buffalo—and maybe in Rochester, too.
Today, there are many unknowns about how these issues will be resolved. A revenue-hungry state government may get its wish, and legislate itself the opportunity to capture some discretionary, disposable income that New Yorkers currently spend in Connecticut, New Jersey, and at the Native American casinos inside New York. Maybe the US District Court will restate its previous decision, and this time, with a new secretary of the interior-designate soon to take office, get the Obama administration’s support for upholing the fairly straightforward 1989 law that specified that no off-reservation casinos can enjoy the same status as on-reservation casinos.
Casino operations have had a profoundly different impact on Native Americans, including those who work for the Seneca Gaming Corporation, than on the overall regional economy. In the next year, an economic disaster could conceivably hit the reservation communities west of the Genesee River, should both the governor prevail with policy and the federal government change course—unless, of course, the Senecas immediately identify, acquire, and profitably operate a whole new set of ventures. But that potential loss won’t be offset by a regional economic gain should New York State go into the casino business. Theire might be a slight gain in net revenue to state coffers, true, but with 85 percent of the trade at the flagship Seneca Niagara Casino already originating within the 716 area code, it’s unlikely that there will be any measurable change in economic impact.
Meanwhile, nearby Canadian communities pursue their own resolution of the casino question, in full view of a shuttered “racino” at Fort Erie Racetrack and a downsized casino presence in the international tourism destination known as Niagara Falls, Ontario. Decisions up north are due in Hamilton, Barrie, and Kingston before summer, and perhaps sooner in Toronto, where the public health authorities have recently condemned the proposal to locate a casino. Health concerns, economic-impact concerns, and law-enforcement issues discussed there may have as much weight as they’ve had here—that is, less weight than concerns over revenue. But at least in Hamilton, the pushback may succeed.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or at www.sunypress.edu.

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Avoidance dance 2/21/13


Bashng Cuomo, Ducking Mergers

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For Upstate mayors, scapegoating is easier than regionalizing

Next week in Toronto, a policy institute will host a session that every Upstate New York mayor, county executive, comptroller, and chamber of commerce leader should but probably won’t attend. The panel is called “Municipal Mergers in Montreal and Toronto: Is Bigger Better?” and it will feature economists, planners, and other people who know how to count the many ways in which those two cities crunched lots of squabbling little municipalities into big, successful, efficient, regional governments that have helped turn big urban economies into gigantic regional economies.
They’re polite enough to pose the issue of local-government merger and consolidation as a question, but there really isn’t any question about whether it has worked for the big cities. The only question remaining is how well it has worked for the medium-sized cities. (Hint: See answer number 1.)
Meanwhile, back in the land of permanent fiscal crisis, the mayor of Syracuse and the New York State comptroller are slamming Governor Andrew Cuomo for his new deal for the cash-strapped cities of the old Empire State rust belt. Cuomo, eager to clean up the devastation of Hurricane Sandy so that the economic engine of the state recovers, offered a deal to Buffalo, Rochester, Syracuse, Utica-Rome, Schenectady, and all those other Upstate cities that complain about their police, fire, and municipal-worker pension obligations. Cuomo’s budget wonks put forward an optional plan that would let these shrinking cities stretch out their employee pension payments, borrowing long-term to enjoy some short-term savings, on the very reasonable assumption that in coming years the tab for new employees that have new, less-generous benefit packages will cost less than today’s benefit plans.
“Gimmick,” the critics are saying. “Give us more money,” the mayors are saying. In response, Cuomo dispatched his lieutenant governor, former Rochester Mayor Bob Duffy, to tell recalcitrant mayors that they had a choice: Either take Cuomo’s offer or get a control board just like Buffalo has.
What Cuomo is not saying, at least not yet, is that the structural fiscal distress of Upstate’s cities, counties, and school districts has a Toronto solution, a Montreal solution, indeed, a New York solution: Hang together instead of hanging separately.

50 years of avoidance

Regional failure results when cities and suburbs are governed separately within urban regions. That’s because all those little self-ruling municipalities—former Albuquerque Mayor David Rusk called them “iron boxes”—work as hard as they can to steal taxpayers from one another, with the active connivance of the bankers and real-estate developers who make big campaign contributions to the politicians. Cuomo knew that the iron boxes were breaking cities, but he also knew that no governor can impose a new structure from on high. So what he did was to embrace two very centrist ideas: a property tax cap and an optional consolidation bill.
The tax cap was a political necessity, because the property tax—which funds school districts, cities, villages, towns, and counties—is everybody’s gripe. In places where the market value of real estate rises, the gripe is harder to sustain, because paying a lot of taxes on an asset that an owner can cash in is just a part of the deal that still favors the owner. Paying a growing share of income for taxes on a modest, non-appreciating asset—like a median-value $110,000 house in Erie County—is a harder deal to sell.
Everybody wanted to cap annual tax increases at two percent, so Cuomo got out ahead and embraced it. But with an irreducible cost of providing services, and some rising costs, some of these municipalities and school districts started feeling the pinch this past year. In the Buffalo area, the Kenmore-Tonawanda School district has been sounding the alarm that a combination of rising employee-benefit costs and shrinking enrollments would force service cuts. In Cheektowaga, the five separate school districts have been holding consolidation talks, because the price of going it alone—with five separate sets of school administrators and no sharing of high-cost services—is eating up budgets.
More than a decade ago, an Erie County executive candidate defeated a three-term incumbent by campaigning on consolidating the two largest Buffalo-area governments, the city and the county. Almost a decade ago, a Monroe County executive candidate was crushed for suggesting that Rochester needed to merge with Monroe County, so that there would be one big government, with one set of employees, with a single, county-wide tax base against which to spread the costs of employee salaries and pensions, and the rest of the cost of providing services. Since those campaigns, nobody in politics in New York State has talked about merging cities and counties. Incremental mergers of school districts are being discussed, but only a little: There are 28 school districts in Erie County, but only five of them are discussing any structural change at all.
The issue, by the way, is not anything fiscal or legal. As our draft legislation and legal research showed almost 10 years ago in Erie County, Article 1 Section 9 of the New York State constitution allows cities and counties to merge under what’s known as the “alternative” county law, with the resulting city-county merger resulting in a county-wide government, which is a logical way to organize things, since the next step—combining town governments into the county—would be a finger-snap.
The issue, of course, is that the status quo enriches some bankers, some developers, and some other politically connected folks who profit handsomely from keeping everything sliced up expensively, illogically, and inefficiently. Racism is a principal tool for separatism, but so is the suburban mentality of escape, and the urbanite tendency to regard suburbanites as irredeemable racists. Parochialism is not mandated by law, only by self-interested profiteers and their elected servants.

More crunch coming

But the crisis ahead may be too great even for the resilient, 50-year status quo of the developer-financier-politico class to endure.
The New York State comptroller surveys all the local governments. He publishes a “fiscal distress” monitor, and lots and lots of reports. The latest is entitled “Financial challenges facing local governments: Federal and state aid shrink as a share of revenues.” There’s nothing new here. Everybody in the governing business can recite the conclusions, if not the numbers, and here they are: Buffalo is so unable to pay its own bills that it has a fiscal control board; Syracuse is so unable to pay its own bills that its mayor wants a politically impossible escape from the rules that govern every other city, town, village, school district, and county; Utica and Rome are in free-fall; ditto every other Upstate urban entity except Rochester, which is scraping by notwithstanding the demise of Kodak.
That’s not news. What is new is that there is a governor in Albany who understands two issues. First, he knows that governments have the option of combining instead of going it alone. Second, he knows that he controls their bailout money.
Right now, Cuomo is fresh out of extra money, due to Hurricane Sandy. He has succeeded in negotiating new contracts with public employees. He also succeeded in creating a new pension tier, so that future public employees won’t have it so good.
Former Governor Mario Cuomo, like Malcolm Wilson before him and George Pataki after him, convened blue-ribbon commissions that all recommended that Upstate regions regionalize their local governments. On at least three occasions when Cuomo came to Buffalo promoting his consolidation legislation while attorney general, he told audiences that he was extremely supportive of the great preparatory work done by the city-county consolidation commission chaired by late UB President Bill Greiner.
Now we have the tax cap, the 50-year legacy of suburban sprawl without regional population growth in every single Upstate metro area, and every kind of technology, from customer-relations databases to just-in-time dispatches to remote GPS tracking devices, to enable and encourage efficient regional service delivery. Cuomo evidently got tired of telling local government leaders that they could restructure, merge, do shared services agreements, maybe even regionalize the way that Toronto, Montreal, Hamilton, and faraway, exotic places like New York City, Indianapolis, Louisville, or Nashville have. Now, one guesses, he’s waiting for some of these mayors and county executives to come to the realization that all the tools they need are at hand, requiring only the dawning recognition that they can’t go to the governor for money—but they might be able to ask him for some help.
Bruce Fisher is a former deputy executive for Erie County and currently director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or at www.sunypress.edu.

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Chattering for money 2/28/2013


Thought Leaders in Retreat

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How the “legacy cities” movement betrays metros

Everybody reading an independent, city-oriented weekly newspaper is already convinced that it’s better to live in a funky, interesting, diverse city than in a boring, monocultural suburb—and if you are stuck living in a suburb, you read independent, city-oriented weekly newspapers because it’s an identity statement, an assertion of preferences that has less to do with your income than it does with your outlook. But being a member of what the late Daniel Bell called a “consumption community” that prefers cities to suburbs is like identity politics: You may get some group solidarity out of the deal, but the dominant paradigm will still rule.
Two new reports—one about local-government finance, the other about public pensions—have the same message: It’s the dominant paradigm or structure that is the problem. Shrinking cities surrounded by sprawling suburbs; isolated geographies of urban poverty that are administratively marooned; school districts that are overwhelmed by the children of poverty; multiple units of government acting independently within metro economies—these are the elements of a near-universal American reality that, at worst, dooms city-focused revitalization, and at best impedes it.
Cities demonstrably work when their boundaries encompass metro areas. Yet a well-funded and politically wired new movement of consultants, planners, activists, and policy entrepreneurs works hard on the identity politics but assiduously avoids addressing failing cities, stressed suburbs, free-riding exurbs, and the interdependencies among them that can only be addressed if the free-riding stops and the all-for-one collaboration begins. City-loving has become a self-adulating profession, while the suburbs go it alone, and the entire American economy, and the polity as well, suffers from the splintering.

The American way

Localism is everywhere. City and suburban boundaries established in the 18th and 19th centuries were reinforced by two huge Washington policy changes in the 20th century—namely, the 1948 decision to subsidize mortgages for World War II veterans if and only if the houses were new-builds (and almost all of the new-builds were suburban), and the 1974 Supreme Court decision in the Milliken case, which stimulated middle-class flight past city borders to the suburbs.
Boomers briefly “discovered” their parents’ and grandparents’ cities in the 1970s, but the Census data confirms that Boomers acted just like their parents when it came to choosing suburban over urban sites for child-rearing. Boomers and millenials are “discovering” some cities again, but the pattern of childbirth is the same. Suburbs that began life as distinct rural towns a century ago became multi-generational bedroom communities for commuters, then, with job-sprawl, home to office parks, too. The snapshot of most metros these days has led some planners to observe that a convergence is going on: Except for the concentrations of poverty still characteristic of old center-cities, cities now have suburban-style gas stations, strip malls, cul-de-sacs, and over-wide five-lane streets just like the old bedroom suburbs, while low-rise, mixed-use, “walkable” streets that have a distinctly 19th-century demeanor have either survived or are being created in suburbs. City density is evening out with suburban density. The poorest city neighborhoods are as empty as rural areas. The City of Buffalo’s school population dropped from 45,000 in 2000 to 32,000 today; the 140,000 school kids in Erie County are 20,000 fewer than 10 years ago, but the larger share of them are in the suburbs.
The spatial redistribution of them itself, however, is not enough to justify the existence of 28 separate school districts for them. In Raleigh, North Carolina, a larger and growing school-age population in roughly the same geographic area has one single school district.
The new report from Moody’s Investor Services, which is the outfit that rates the credit-worthiness of governments at every level from villages to nations, says that the American norm of separate local governance in all of those places is breaking down. Moody’s says that there will be dire times ahead for local governments and school districts, as there already are for public hospitals, because of several factors—including duplication, especially of administrative overhead, and also because of the way federal funds get spent ineffectively by being sliced up into little pieces. Now, Moody’s says, an additional problem looms: The impasse in Washington will make things worse because even the little pieces of federal revenue won’t be shared, but eliminated, at the same time as the post-2008 crash funds from state governments have withered. The $3 trillion municipal-bond industry, which issues long-term paper that mainly requires the full faith and credit of local governments that rely on property taxes, has been badly shaken over the past few years, because the property-tax base has been shaken and hasn’t yet recovered.
Nor can it be expected to. The reality for a mayor is that, except in what Wharton School economist Stephen Gyourko calls “superstar” cities, population loss and the relentless campaigns for handouts to developers mean that city tax bases are not growing fast enough to pay all the bills. (We celebrate successful adaptive-reuse projects in Buffalo, but the taxpayer subsidies make nullities of the new offices, new lofts, new hotels, and new medical corridor projects.) The reality for county elected officials is different but the stresses are the same: Counties, like Buffalo’s Erie County, see increasing demands from far-flung “new” suburbs for more road maintenance, more county-funded police services, more sewer hookups and water-line extensions, but with population that is simply redistributing itself from city to suburb and then from inner suburb to outer suburb, the annual bill for maintaining what’s getting built rises without any new sources of revenue.
Here’s what’s weird about what the current generation’s thought leaders on cities have to say about any of this: What’s weird is that they are silent.

Attitude versus analysis

Suburbs may have gone out of fashion with the smart set, but suburbs still define American urban reality. Edgy bloggers like Aaron Renn in Chicago, and high-paid academics like Richard Florida in Toronto, and everybody in the intellectual end of planning, historic preservation, or economic development are all about cities, not suburbs.
Yet though the fiscal and demographic realities should be putting boots upside those heads, even those who focus on “shrinking” or “legacy” cities are silent. Greatly successful Chicago, with its Millennium Park innovations and itd brilliant gentrification, has lost 200,000 people in the last couple of decades, down from three million in 1980 to 2.8 million now. Detroit has a very strong and very creative “creative class” development, a meaningful re-migration movement, good adaptive re-uses for old structures, a major commitment to cleaning up broken sewers, a notable urban agriculture movement underway in an area of abandonment that is actually as large as the entire area encompassed by the boundaries of the City of Buffalo—but Detroit is in demographic free-fall, and in fiscal crisis, too. Detroit is in such bad shape that Detroit is about to get what Buffalo got during Anthony Masiello’s term as mayor: a financial control board.
Today’s city-loving classes, however, don’t want to talk about that yucky stuff—nasty old racism or boring old municipal finance. The news about imminent bankruptcy for the City of Detroit should not be news in insolvent Buffalo, but somehow, some folks in Detroit, and here, and in Cleveland, and in other fiscal-critical-list cities, think the day will be saved by restaurants and seasonal diversions. Detroit has infrastructure for three million people, but its population today is 750,000. So few of them are taxpayers that there isn’t enough revenue to keep traffic lights lit. Ditto Buffalo, Cleveland, Syracuse…the money to keep the lights on is in short supply if the supply is bounded by the city limits.
You would think that the hundreds of economists, professors of law, municipal bond experts, and elected officials would collectively have figured out that if a city built for three million people now houses only one-quarter that number, and that the metro area there, as here, consists of people who used to live within one box but then moved to another box, with no net new population in the combined boxes, then something about the boxes should change.
But in the Rust Belt, a foundation-funded industry of city-lovers leaves the boxes alone. The industry consists of folks who are so focused on the arts, restaurants, loft apartments, urban gardens, and whose leading suggestion for shrinking cities is to withdraw services from whole swaths of territory, that they miss the urgent realities that face the lowly public servants who are supposed to make the toilets flush, the spigots flow, the streets navigable, and the trees trimmed so that they neither hide criminals nor crash limbs onto perambulators.
As we speak, major foundations fund a producer-class of progressive academics and some former and would-be planners, and the middle-man class of politically wired consultants who arrange for these report-writers to stay at hotels, give papers at plenary sessions, and generally talk that talk about good ideas for saving old cities, but somehow never get around to explaining how the folks who govern today are going to pay the bills tomorrow when the users of their services pay taxes outside but not inside their boundaries. The Ford Foundation, the Surdna Foundation, the Tides Foundation, and a few others pass millions of dollars to independent entities like the Center for Community Progress in Washington, and to various state-based coalitions and research institutes, and of course to consultants and meeting-arrangers. Seances are held, speeches are delivered, panelists present, dinners are eaten, and in the aftermath, reports are published, and broad-swath recommendations about how to make cities richer, smarter, greener, and happier pile up, as if cities exist without suburbs, and suburbs without exurbs.
And realities remain. The first reality is that the suburbs of distressed old American cities still sprawl while the old cities still shrink. Second, the tax bases of old cities continue to be so inadequate to providing sufficient revenue to fund services that places like Buffalo and Detroit get control boards while other places just cut services and personnel, while others, like Harrisburg, Pennsylvania, go bankrupt. The third reality, especially in the Rust Belt, is that neither progressive-minded consultants nor their funders ever discuss metropolitan government, city-county merger, or the two-sides-of-the-same-coin issue of abolishing elective offices or creating new regional governments. Cities remain governed separately from their suburbs, not only in New York State, but just about everywhere else in America.
In a couple of places—most notoriously in Miami and Dade County in Florida—the failing, corrupt city dissolved itself and became the county.
Strangely, legal scholars, who are usually a reactive group in that they write a whole heckuva lot more about recently decided cases than about policy ideas, are chiming in where other intellectuals fear to tread. There is an impressive and growing scholarly literature in law journals about what has been called “the new regionalism.” The lawyers are even using the “d” word these days: dissolution. They look at the Miami miasma of corruption and voter fatigue, and some suggest that Miami’s is the teachable case. Voters there flushed out at least one nest of corrupt politicians. They did not choose to downsize them incrementally as Kevin Gaughan has suggested here, but instead just lopped off a layer of government entirely.
But that is not a discourse that has any legitimacy in the “shrinking” or “legacy cities” movement. Failure is failure, stress is stress, broke is broke, but when consultants change the name of a problem in order to make its sting less sharp, it’s time for a reality check. When the people who rate the bonds say that everybody’s ratings are going to go down unless certain realities are addressed, the time for spin is over. All over.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or at www.sunypress.edu.

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