The Nation’s Future Depends on Its Cities, Not on Washington

.photo.right{display:none;}To avoid Detroit’s fate, cities need to turn back the clock. City-states will be the future of the global economy.

The Detroit Skyline, as seen from Windsor, Ontario, in 1929.
National Journal
Michael Hirsh
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Michael Hirsh
Aug. 28, 2013, 1:21 p.m.

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The res­id­ents of Min­neapol­is-St. Paul suf­fer, col­lect­ively, from a ser­i­ous in­sec­ur­ity com­plex. They’re al­ways talk­ing about how no one knows any­thing about their “twin” cit­ies on the up­per Mis­sis­sippi River. Young pro­fes­sion­als nev­er want to live there, com­plains loc­al au­thor Jay Walljasper, who did a study of where those sought-after Gen X-ers and Y-ers want to go. “They all had as­pir­a­tions for Toronto, Chica­go, Pitt­s­burgh, Wash­ing­ton, Montreal. I kept wait­ing for them to men­tion Min­neapol­is-St. Paul,” he says. “But we were not on the radar.”

To the ex­tent that any­body pays at­ten­tion at all, people tend to make fun of “MSP” (the pre­ferred ab­bre­vi­ation; the cit­ies’ col­lect­ive name is as un­gainly as its repu­ta­tion) — even homeys such as Gar­ris­on Keil­lor, who’s made a ca­reer out of Min­nesotan self-de­prec­a­tion. Some “Twin Citians” (many hate that nick­name, too) grimly joke that the last thing that brought them na­tion­al at­ten­tion was The Mary Tyler Moore Show, the 1970s sit­com about a thirtyso­mething TV re­port­er based there. As if to drive home just how deep the in­sec­ur­ity runs, the middle of down­town Min­neapol­is fea­tures a slightly ri­dicu­lous bronze statue of the act­ress throw­ing her “tam,” as in the open­ing cred­its of her long-ago show.

And yet in an odd way, the Twin Cit­ies’ iden­tity crisis has also proven to be one of their greatest eco­nom­ic strengths. One can’t quite put one’s fin­ger on ex­actly what’s there be­cause, well, there’s an aw­ful lot there. Di­versity, in a word, is the secret sauce that cre­ates urb­an suc­cess. Though once known as a grain-milling cap­it­al, MSP lost that title to Buf­falo in the 1930s, and now a slew of For­tune 500-sized com­pan­ies with a vast vari­ety of busi­nesses are headquartered in the re­gion, in­clud­ing Car­gill, Gen­er­al Mills, 3M, Tar­get, and U.S. Ban­corp. And driv­en by all that am­bi­tion to put them­selves on the map, Twin Citians dis­play a civic pride that has promp­ted con­stant re­in­ven­tion and in­spired re­gion­al co­oper­a­tion. As a res­ult, MSP today en­joys the low­est un­em­ploy­ment rate (5.1 per­cent) of any ma­jor met­ro­pol­it­an area in the na­tion, and its pop­u­la­tion is sur­pass­ing De­troit as the second largest in the Mid­w­est, after Chica­go. Min­neapol­is-St. Paul has also en­joyed more eco­nom­ic sta­bil­ity since World War II — with few­er ups and downs, and stead­i­er growth — than most oth­er Amer­ic­an cit­ies. “We don’t know what we are,” says former Min­neapol­is Star Tribune colum­nist Steve Berg. “But it’s still a great place to live.”

De­troit, of course, nev­er suffered an iden­tity crisis. Every­one al­ways knew what the Mo­tor City stood for: the Big Three auto­makers. So much so that “De­troit” has been as much a syn­onym for Amer­ica’s chron­ic­ally ail­ing auto in­dustry as “Wash­ing­ton” is for the fed­er­al gov­ern­ment. And that, in sum — a lack of di­versity — was one of De­troit’s biggest prob­lems, con­trib­ut­ing to last month’s largest- ever bank­ruptcy fil­ing by a city in U.S. his­tory. The city’s en­tire so­cioeco­nom­ic sys­tem was built around autos, with an “in­dus­tri­al middle class” nur­tured by the United Auto Work­ers. When the auto in­dustry fell on hard times, everything went with it. The blue-col­lar work­ing class — non-col­lege-edu­cated, trained only to build and ser­vice cars — drif­ted in­to poverty with no re­course. For cit­ies, eco­nom­ic di­versity is as im­port­ant as main­tain­ing a broad port­fo­lio of stocks is for in­vestors.

What also sank De­troit was that its lead­ers failed to con­nect with the sprawl around it and turn the sub­urbs in­to part of a uni­fied eco­nom­ic base. That is an­oth­er fea­ture of Min­neapol­is-St. Paul’s suc­cess: It es­tab­lished a tax-shar­ing plan with scores of sub­urb­an com­munit­ies. In the De­troit area, by con­trast, the city and sub­urbs be­came vir­tu­al en­emies. A sim­il­ar dy­nam­ic led to oth­er failed cit­ies, such as Ne­wark, N.J., once the haven (and in­spir­a­tion) of a large Jew­ish pop­u­la­tion, in­clud­ing Philip Roth, who fled to the sub­urbs and nev­er looked back. There was, on one hand, a des­per­ate in­ner city that led to “white flight,” and on the oth­er an af­flu­ent, largely Caucasi­an sub­ur­bia that did everything but put up walls against the city that en­gendered it. In today’s world, that is a re­cipe for ru­in.

“De­troit was dealt a fairly bad hand, at least in re­cent years. The de­cline of man­u­fac­tur­ing and real hourly wages in the United States had made it a tough 40 or 50 years for the demo­graph­ic that De­troit de­pends on,” says Mark Funk­houser, the former may­or of Kan­sas City, Mo., and an urb­an con­sult­ant based in Wash­ing­ton. “On the oth­er hand, they played that hand fairly badly. The thing to do in a really harsh eco­nom­ic en­vir­on­ment is to en­hance com­pet­it­ive­ness and com­pete for a lar­ger tax base. De­troit did the op­pos­ite. Un­der Cole­man Young [De­troit’s first black may­or, who served from 1974 to 1994], everything was done for polit­ic­al reas­ons. Every time an­oth­er white fam­ily left De­troit he lost some op­pos­i­tion votes. So he had no in­terest in reach­ing out to sub­urb­an com­munit­ies. He be­nefited from white flight.” De­troit went from be­ing more than 80 per­cent white in 1950 to more than 80 per­cent Afric­an-Amer­ic­an today.

This is also the great neg­at­ive les­son for cit­ies and re­gions that want to avoid De­troit’s fate, be­cause to a great ex­tent the fu­ture be­longs to suc­cess­ful cit­ies and, even more, to the met­ro­pol­it­an areas for which they serve as hubs.

Iron­ic­ally, giv­en the nature of our high-tech, su­per-con­nec­ted age, the fu­ture will look more and more like the city-states that ruled the world for mil­len­nia, from the days of Athens, Sparta, Carthage, and Rome, and that were last dom­in­ant 500 years ago, in such places as Venice and Florence, be­fore the form­a­tion of most mod­ern na­tion-states. Today, the shin­ing ex­ample is Singa­pore, the city-state of 5.2 mil­lion people that, all by it­self, has be­come an Asi­an ti­ger. The city-state of the fu­ture will not be sov­er­eign, of course, but in­stead will act largely in­de­pend­ently. “What we are ex­per­i­en­cing is a metro-centered driv­ing force of change. This is the cen­ter of the eco­nom­ic uni­verse,” says James Brooks, pro­gram dir­ect­or of the Na­tion­al League of Cit­ies. “The United States is not one na­tion­al eco­nomy but a series of smal­ler met­ro­pol­it­an eco­nom­ies.”

The fu­ture, in oth­er words, is go­ing me­di­ev­al.

WHY CIT­IES WORK

The rise of the city-state has been a long-term trend, but it’s gain­ing speed. Today, the 388 metro areas in the United States make up 84 per­cent of the na­tion’s pop­u­la­tion and an as­ton­ish­ing 91 per­cent of gross do­mest­ic product. The top 100 metro areas alone total two-thirds of the U.S. pop­u­la­tion and three-quar­ters of GDP. And the world is catch­ing up. “Today’s roughly 50 per­cent urb­an pop­u­la­tion will climb to nearly 60 per­cent, or 4.9 bil­lion people, in 2030. Africa will gradu­ally re­place Asia as the re­gion with the highest urb­an­iz­a­tion growth rate,” ac­cord­ing to a re­cent re­port by the gov­ern­ment’s Na­tion­al In­tel­li­gence Coun­cil. Urb­an cen­ters are es­tim­ated to gen­er­ate 80 per­cent of eco­nom­ic growth in the world, and the per­cent­age may be grow­ing be­cause of the way well-built urb­an areas with  good in­fra­struc­ture — in­clud­ing state-of-the-art In­ter­net and tele­com pipelines — can bet­ter ap­ply re­sources and make more ef­fi­cient use of tight pub­lic funds.

Per­haps that’s why, in his new book An­ti­fra­gile: Things That Gain From Dis­order, the trader-turned-philo­soph­er Nas­sim Nich­olas Taleb writes that the city-state is more ad­apt­able and there­fore more dur­able than the na­tion-state. Con­sider the polit­ic­al para­lys­is at the na­tion­al level in the United States and Europe — in part the res­ult of gov­ern­ments that are just too huge, scler­ot­ic, and cum­ber­some — and the po­ten­tial frac­tur­ing of states in the Middle East even as cit­ies such as Bagh­dad or Dam­as­cus will likely re­main in­tact. For mul­tina­tion­al com­pan­ies, thriv­ing met­ro­pol­it­an re­gions are in­creas­ingly the ba­sic mac­roe­co­nom­ic unit. “A city is too small, and a coun­try is too big,” Funk­houser says. “Coun­tries are too blunt an in­stru­ment in which to com­pete.”

Crit­ic­ally, the polit­ics works bet­ter at the metro level as well: Re­pub­lic­an and Demo­crat­ic may­ors in met­ro­pol­it­an areas tend to co­oper­ate more than their coun­ter­parts at the na­tion­al level, says Scott Smith, the Re­pub­lic­an may­or of Mesa, Ar­iz., and pres­id­ent of the U.S. Con­fer­ence of May­ors. Why? “Be­cause they have to solve prob­lems. In Wash­ing­ton they don’t sense this need,” Smith told Na­tion­al Journ­al. “I still have to pick up the garbage on Thursday. When someone di­als 911, I have to make sure the po­lice show up.” Smith adds: “There is no such thing as na­tion­al eco­nom­ies any­more. That’s why you see the  big busi­ness deals done not so much between com­merce sec­ret­ar­ies any more as between may­ors, like the may­or of Shang­hai and the may­or of Los Angeles.”

The smartest city lead­ers have long since re­cog­nized these trends. Con­sider the story of Mike Bell, the may­or of Toledo, Ohio, a seem­ingly typ­ic­al Mid­west­ern Rust Belt city. Be­cause the fate of Toledo, like that of De­troit, was linked to the auto in­dustry, as soon as he was elec­ted in 2010, Bell began care­fully study­ing his much lar­ger sis­ter city’s ail­ments. And he ac­ted to pre­vent Toledo from suf­fer­ing the same fate: Since 2010, Toledo has gone from a $48 mil­lion budget de­fi­cit to a $5 mil­lion sur­plus, without rais­ing taxes or lay­ing off city work­ers. How? One key to his suc­cess, Bell says, was to real­ize that his role as both may­or and sales­man-in-chief isn’t lim­ited to Toledo prop­er; he needed to pitch his sub­re­gion as far away as China. “I’m a re­gion­al may­or, and I’m also a glob­al may­or,” Bell ex­plained in an in­ter­view.

When talk­ing to po­ten­tial for­eign in­vestors, he would draw a circle around Toledo show­ing that if you moved out from the city 500 miles in every dir­ec­tion, you could reach 60 per­cent of the en­tire Mid­west­ern pop­u­la­tion. “A pic­ture is worth a thou­sand words,” Bell says. He took that pu­tat­ively an­cient Chinese wis­dom dir­ectly to in­vestors in Shen­zhen, win­ning a sur­pris­ing amount of in­vest­ment in busi­nesses as di­verse as res­taur­ants and sheet met­al. All of his mis­sions have in­cluded oth­er may­ors and Port Au­thor­ity of­fi­cials from the re­gion. In the end, ac­cord­ing to a study by the McKin­sey Glob­al In­sti­tute, Bell has giv­en Toledo an out­sized repu­ta­tion con­sid­er­ing that it ranked only 182nd in For­bes‘ “2012 Best Places for Busi­ness and Ca­reers.”

Funk­houser says of­fi­cials such as Bell have it right. “When I was may­or, I told my of­fi­cials that the Kan­sas City re­gion com­petes against the Den­ver re­gion — but also the Shang­hai re­gion. That’s really the way the eco­nomy works now. If you are a frag­men­ted dys­func­tion­al re­gion, if the cen­ter city doesn’t get along with the sub­urbs, then you lose the crit­ic­al mass you need.” De­troit, once again, provides a dole­ful counter­example where growth was un­gov­erned and not un­der­pinned by ef­fect­ive mass trans­it or in­fra­struc­ture. “The level of job sprawl in De­troit is stag­ger­ing,” says Bruce Katz, an urb­an ex­pert at the Brook­ings In­sti­tu­tion. “About 80 per­cent of the jobs are loc­ated more than 10 miles away from the cent­ral busi­ness dis­trict. The av­er­age for the coun­try is about 40 per­cent.”

The In­form­a­tion Age char­ac­ter­ized by hy­per-con­nec­ted­ness and com­pet­i­tion among cen­ters of in­nov­at­ive activ­ity has, iron­ic­ally, ten­ded “to re­ward those places where in­nov­a­tion hap­pens in closed spaces,” Katz says. The more in­teg­rated and “thick­er” the eco­nomy — the more densely layered it is with an ag­glom­er­a­tion of com­pan­ies and re­search­ers — the great­er the re­wards. Just last week, the Na­tion­al Sci­ence Found­a­tion pub­lished a re­port con­clud­ing that a quarter of all Amer­ica’s sci­ent­ists and en­gin­eers live in just five met­ro­pol­it­an areas in Cali­for­nia, New York, and Texas.

In­ter­est­ingly, the new metro age once again puts the U.S. at a com­pet­it­ive ad­vant­age with the world, Katz says. “In part, our suc­cess is that we are the quint­es­sen­tial met­ro­pol­it­an na­tion — more met­ro­pol­it­an than Europe or rising coun­tries like China or Brazil. Even in Europe, it’s a smal­ler por­tion of the pop­u­la­tion that lives in cit­ies, though they are urb­an­iz­ing now.”

HEED­ING DOLLY PAR­TON

Urb­an ex­perts say it’s im­port­ant for city plan­ners to get the prop­er blend of in­vest­ment and re­sources for each par­tic­u­lar city and metro area, be­cause each has a unique pro­file. “Dolly Par­ton, a great eco­nom­ist, once said, ‘Find out who you are, and do it on pur­pose,’ ” Katz jokes. That ap­plies to cit­ies as well, which are con­stantly over­reach­ing in their ef­forts to re­in­vent them­selves — and grow fast. Every­one, it seems, wants to be the next Sil­ic­on Val­ley, and that won’t work. The rush to build cluster-like in­dus­tri­al or re­search parks can mis­fire if the right com­bin­a­tion of in­vest­ments isn’t achieved. “Sixty to 70 per­cent of clusters fail; even if you do build them, it can take 20 years to find out,” says Jonath­an Wo­et­zel of the McKin­sey Glob­al In­sti­tute, who re­cently coau­thored a re­port called “How to Make a City Great.”

One ad­mon­it­ory tale is the rise and re­l­at­ive de­cline of Re­search Tri­angle Park, the vast com­plex that lies between Raleigh, Durham, and Chapel Hill in North Car­o­lina. Con­sidered state-of-the-art think­ing when it was built in 1959, the park helped to bring North Car­o­lina in­to the In­ter­net age. But its vis­ion­ar­ies failed to keep pace with the new cachet of cit­ies. IBM sold its com­puter busi­ness, and jobs moved out. Worst of all, it be­came un­cool. “The cur­rent gen­er­a­tion of tech work­ers doesn’t want to toil in the soul­less Of­fice Space com­plexes sur­roun­ded by moats of park­ing that dot Re­search Tri­angle Park’s sprawl­ing vast­ness,” wrote Ly­dia De­pil­lis in The New Re­pub­lic last year. Now the park is try­ing to give it­self a new “urb­an liv­ing” im­age in an at­tempt to achieve more “dens­ity.”

“Over the past couple of dec­ades, what we saw were a lot of cit­ies that were copyc­at­ting, es­sen­tially,” Katz says. “They were par­tic­u­larly fo­cused on the con­sump­tion eco­nomy: sta­di­um build­ing, con­ven­tion-cen­ter ex­pan­sion. You’d go from one city to an­oth­er and see pretty much the same thing. What they wer­en’t fo­cused on was the por­tion of their eco­nomy that drives everything else. What goods do you make? What do you trade, who do you trade with, both do­mest­ic­ally and glob­ally?”

Sta­di­ums and big-league teams add al­lure, but the more sus­tain­able need is for “eco­nom­ic garden­ing” for grass­roots growth, Wo­et­zel says. Let the private sec­tor make most of the de­cisions, and don’t suc­cumb to the tempta­tion to over­plan. Above all, don’t stray too far from your city’s rais­on d’etre. “In Kan­sas City, the city fath­ers and moth­ers are em­bar­rassed about the im­age of a cow town, and they run away from it, which is ab­so­lutely ab­surd,” Funk­houser says. “The reas­on for Kan­sas City’s ex­ist­ence is that it was as far north as you went to put cattle in­to cars to go to Chica­go,” where they were slaughtered. As a res­ult, today Kan­sas City is a lo­gist­ic­al hub, with the second-largest freight-rail sys­tem in the coun­try after Chica­go. And that, Funk­houser says, is also the source of its fu­ture vi­ab­il­ity. “In­stead of run­ning around try­ing to cre­ate en­ter­tain­ment dis­tricts and things like that, the live­stock, ag­ribusi­ness stuff ought to be what they fo­cus on. On one hand, you want di­versity. On the oth­er hand, you don’t want to do a whole lot of ‘me-toos.’ What is your nat­ur­al strength? One of the cri­ti­cisms of Mi­chael Bloomberg in New York was how much he em­braced Wall Street. Well, hell, that is the main driver of New York City’s eco­nomy.”

May­or Smith of Mesa says city plan­ners must res­ist the tempta­tion to simply fol­low the most glam­or­ous trend. “There was a time when bio­med was pop­u­lar,” he says. “If Mesa went after bio­med, that would be a fool’s er­rand be­cause we don’t have bio­med.” In­stead, Smith set about fig­ur­ing out what his city’s or­gan­ic growth cen­ters were and came up with a bump­er stick­er: HEAT, which stands for health care, edu­ca­tion, aerospace, and tour­ism and tech­no­logy. He de­cided his city should try to at­tract small lib­er­al-arts col­leges of the kind that are still too rare in the South­w­est.

Healthy growth should also be well paced. Growth that hap­pens too fast can lead to prob­lems such as Beijing’s hor­rif­ic air pol­lu­tion or to the kind of un­gov­erned sprawl that out­paces in­fra­struc­ture or mass trans­it. That even­tu­ally frag­ments urb­an areas, as happened in De­troit. Port­land, Ore., con­sidered by many to be a mod­el of how to take an old city in­to a new era, has even con­tro­ver­sially laid down a “re­gion­al growth bound­ary.” True, Port­land had the luck of be­ing situ­ated between the  Sil­ic­on Val­ley and Seattle — and the leg­acy of headquar­ter­ing In­tel and Tek­tron­ics — but it also de­veloped a vis­ion for sus­tain­able de­vel­op­ment and ex­port strategies with Asia.

Brooks says the obstacles hold­ing back growth can some­times be as simple as get­ting the city charter right. “The De­troit city charter is very dif­fer­ent from oth­er charters. It’s very spe­cif­ic about what is re­quired by the city gov­ern­ment and what can’t be done,” he says. “For ex­ample, it’s very dif­fi­cult to con­tract out its ser­vices. The charter doesn’t al­low that. That con­strained the flex­ib­il­ity of the city gov­ern­ment. Gov­ern­ments have to be nimble.”

THE SECRETS OF SUC­CESS

The Na­tion­al League of Cit­ies’ Brooks and oth­er urb­an ex­perts point to four in­gredi­ents es­sen­tial to met­ro­pol­it­an suc­cess.

Con­sist­ent vis­ion. Be­cause suc­cess­ful city plan­ning can take dec­ades to pan out, pa­tience and stead­i­ness are re­quired. Con­sider Chat­tanooga, Tenn., where its lead­ers are still put­ting in place a 45-year plan that has trans­formed the city from one of the most pol­luted in Amer­ica to a highly liv­able and sought-after place, at­tract­ing huge amounts of for­eign in­vest­ment. Today be­lea­guered cit­ies such as Clev­e­land, once de­rided as “the mis­take on the lake,” are pur­su­ing new strategies. For Clev­e­land, it is to be­come the “green city on a blue lake,” as its “Sus­tain­able Clev­e­land 2019” strategy puts it.

Lead­er­ship. Hand in hand with vis­ion comes lead­er­ship that is con­sist­ent and pub­lic-minded. Above all, as in the case of Chat­tanooga and Port­land, a city must have a strong cul­ture that pro­motes such lead­ers in  the private and pub­lic sec­tors. New York has avoided the im­age of a has-been city and re­mained the most com­pet­it­ive be­cause its may­ors are con­stantly re­in­vent­ing it, as Rudy Gi­uliani did with his tough an­ticrime agenda and Mi­chael Bloomberg has done by in­vest­ing in R&D and “green” in­nov­a­tion.

Pub­lic-private part­ner­ships. Busi­ness, civic, and gov­ern­ment lead­ers must act as a team. In Pitt­s­burgh, for ex­ample, phil­an­throp­ic ef­forts by the Carne­gies and the Mel­lons helped the city enorm­ously in mak­ing the trans­ition from Rust Belt steel city to edu­ca­tion­al and med­ic­al hub.

Re­gion­al think­ing. This is the new sine qua non for cit­ies. In the fu­ture, none will suc­ceed without it. Like Toledo’s Bell, Col­or­ado Gov. John Hick­en­loop­er, when he was may­or of Den­ver, cre­ated a “caucus” of more than 30 area may­ors who met reg­u­larly and helped jointly de­vel­op a re­gion­al light-rail sys­tem. Of­fi­cials be­hind the Great­er Hou­s­ton part­ner­ship have made sim­il­ar ef­forts. “You can de­vel­op re­gion­al col­lab­or­a­tion in lots of ways,” Funk­houser says. “Tax-base shar­ing, shared-ser­vices agree­ments. But, primar­ily, it really starts with the re­la­tion­ship between elec­ted lead­ers. They have to be on the same page. Cit­ies and metro areas are gov­erned es­sen­tially as a re­gime.”

All these factors can breed a crit­ic­al sur­viv­al trait for suc­cess­ful cit­ies and their metro areas: re­si­li­ence. Con­sider the con­trast­ing ex­amples of Stock­ton, Cal­if., and Char­lotte, N.C. Stock­ton filed for Chapter 9 bank­ruptcy a year be­fore De­troit did, a vic­tim of too much de­pend­ence on one in­dustry — con­struc­tion — that col­lapsed in a mat­ter of months after the subprime-mort­gage-gen­er­ated fin­an­cial crash in 2008. In Stock­ton, des­cend­ants of Cali­for­nia’s ag­ri­cul­tur­al work­ers flocked to home-con­struc­tion jobs, build­ing houses for middle-class fam­il­ies who worked an hour or two away in the San Fran­cisco Bay Area. The city boomed. But that in­dustry dis­ap­peared vir­tu­ally overnight, and Stock­ton had noth­ing to re­place it. Today it is a night­mare of boarded-up down­town build­ings and rampant crime.

As the home to two ma­jor banks — Bank of Amer­ica and Wachovia — that made dis­astrous choices dur­ing the subprime bubble, Char­lotte was also hard-hit. But the city has come out of it strongly. Like Min­neapol­is-St. Paul, Char­lotte is a far more eco­nom­ic­ally di­verse city than De­troit, with a lot of civic sup­port from its cit­izens, and its gov­ern­ment has in­ves­ted heav­ily in in­fra­struc­ture (former May­or An­thony Foxx just be­came Pres­id­ent Obama’s Trans­port­a­tion sec­ret­ary). Ul­ti­mately, des­pite its trav­ails, Char­lotte was se­lec­ted over sev­er­al oth­er fi­nal­ists (in­clud­ing Min­neapol­is-St. Paul) to host the 2012 Demo­crat­ic con­ven­tion.

There is al­ways room for im­prove­ment, as all those self-con­scious, self-doubt­ing Twin Citians know all too well. Min­neapol­is-St. Paul still has many prob­lems, some of them caused by the ex­odus from De­troit. It suf­fers an un­usu­ally high “achieve­ment gap,” for ex­ample, between its black and white pop­u­la­tions. On this point, the Taleb thes­is on fra­gil­ity will be sorely tested in MSP: How will a metro area that was once largely Scand­inavi­an and West­ern European in eth­nic char­ac­ter handle a large in­flux of His­pan­ics and blacks?

But cit­ies are hardy creatures. There may even be hope for De­troit, if it sur­vives its bank­ruptcy. Thanks to the city’s eco­nom­ic plight, rent­al rates in De­troit’s down­town core are su­per low, and that is already fos­ter­ing a boom­let of en­tre­pren­eur­i­al busi­nesses. A re­new­al of civic pride, and a new re­gion­al ap­proach be­gun by former May­or Den­nis Arch­er — lead­ing to the con­struc­tion of a bridge across the De­troit River to Canada — is help­ing as well. “De­troit is like an un­der­val­ued stock,” says Brook­ings’ Katz. “I think the core is go­ing to come back a lot faster than people think.”

Yet in the end, if a new De­troit is to rise, it will have to em­brace a very dif­fer­ent fu­ture. It will have to go me­di­ev­al.

WHY CITIES WORK

The rise of the city-state has been a long-term trend, but it’s gain­ing speed. Today, the 388 metro areas in the United States make up 84 per­cent of the na­tion’s pop­u­la­tion and an as­ton­ish­ing 91 per­cent of gross do­mest­ic product. The top 100 metro areas alone total two-thirds of the U.S. pop­u­la­tion and three-quar­ters of GDP. And the world is catch­ing up. “Today’s roughly 50 per­cent urb­an pop­u­la­tion will climb to nearly 60 per­cent, or 4.9 bil­lion people, in 2030. Africa will gradu­ally re­place Asia as the re­gion with the highest urb­an­iz­a­tion growth rate,” ac­cord­ing to a re­cent re­port by the gov­ern­ment’s Na­tion­al In­tel­li­gence Coun­cil. Urb­an cen­ters are es­tim­ated to gen­er­ate 80 per­cent of eco­nom­ic growth in the world, and the per­cent­age may be grow­ing be­cause of the way well-built urb­an areas with  good in­fra­struc­ture — in­clud­ing state-of-the-art In­ter­net and tele­com pipelines — can bet­ter ap­ply re­sources and make more ef­fi­cient use of tight pub­lic funds.

Per­haps that’s why, in his new book An­ti­fra­gile: Things That Gain From Dis­order, the trader-turned-philo­soph­er Nas­sim Nich­olas Taleb writes that the city-state is more ad­apt­able and there­fore more dur­able than the na­tion-state. Con­sider the polit­ic­al para­lys­is at the na­tion­al level in the United States and Europe — in part the res­ult of gov­ern­ments that are just too huge, scler­ot­ic, and cum­ber­some — and the po­ten­tial frac­tur­ing of states in the Middle East even as cit­ies such as Bagh­dad or Dam­as­cus will likely re­main in­tact. For mul­tina­tion­al com­pan­ies, thriv­ing met­ro­pol­it­an re­gions are in­creas­ingly the ba­sic mac­roe­co­nom­ic unit. “A city is too small, and a coun­try is too big,” Funk­houser says. “Coun­tries are too blunt an in­stru­ment in which to com­pete.”

Crit­ic­ally, the polit­ics works bet­ter at the metro level as well: Re­pub­lic­an and Demo­crat­ic may­ors in met­ro­pol­it­an areas tend to co­oper­ate more than their coun­ter­parts at the na­tion­al level, says Scott Smith, the Re­pub­lic­an may­or of Mesa, Ar­iz., and pres­id­ent of the U.S. Con­fer­ence of May­ors. Why? “Be­cause they have to solve prob­lems. In Wash­ing­ton they don’t sense this need,” Smith told Na­tion­al Journ­al. “I still have to pick up the garbage on Thursday. When someone di­als 911, I have to make sure the po­lice show up.” Smith adds: “There is no such thing as na­tion­al eco­nom­ies any­more. That’s why you see the  big busi­ness deals done not so much between com­merce sec­ret­ar­ies any more as between may­ors, like the may­or of Shang­hai and the may­or of Los Angeles.”

The smartest city lead­ers have long since re­cog­nized these trends. Con­sider the story of Mike Bell, the may­or of Toledo, Ohio, a seem­ingly typ­ic­al Mid­west­ern Rust Belt city. Be­cause the fate of Toledo, like that of De­troit, was linked to the auto in­dustry, as soon as he was elec­ted in 2010, Bell began care­fully study­ing his much lar­ger sis­ter city’s ail­ments. And he ac­ted to pre­vent Toledo from suf­fer­ing the same fate: Since 2010, Toledo has gone from a $48 mil­lion budget de­fi­cit to a $5 mil­lion sur­plus, without rais­ing taxes or lay­ing off city work­ers. How? One key to his suc­cess, Bell says, was to real­ize that his role as both may­or and sales­man-in-chief isn’t lim­ited to Toledo prop­er; he needed to pitch his sub­re­gion as far away as China. “I’m a re­gion­al may­or, and I’m also a glob­al may­or,” Bell ex­plained in an in­ter­view.

When talk­ing to po­ten­tial for­eign in­vestors, he would draw a circle around Toledo show­ing that if you moved out from the city 500 miles in every dir­ec­tion, you could reach 60 per­cent of the en­tire Mid­west­ern pop­u­la­tion. “A pic­ture is worth a thou­sand words,” Bell says. He took that pu­tat­ively an­cient Chinese wis­dom dir­ectly to in­vestors in Shen­zhen, win­ning a sur­pris­ing amount of in­vest­ment in busi­nesses as di­verse as res­taur­ants and sheet met­al. All of his mis­sions have in­cluded oth­er may­ors and Port Au­thor­ity of­fi­cials from the re­gion. In the end, ac­cord­ing to a study by the McKin­sey Glob­al In­sti­tute, Bell has giv­en Toledo an out­sized repu­ta­tion con­sid­er­ing that it ranked only 182nd in For­bes‘ “2012 Best Places for Busi­ness and Ca­reers.”

Funk­houser says of­fi­cials such as Bell have it right. “When I was may­or, I told my of­fi­cials that the Kan­sas City re­gion com­petes against the Den­ver re­gion — but also the Shang­hai re­gion. That’s really the way the eco­nomy works now. If you are a frag­men­ted dys­func­tion­al re­gion, if the cen­ter city doesn’t get along with the sub­urbs, then you lose the crit­ic­al mass you need.” De­troit, once again, provides a dole­ful counter­example where growth was un­gov­erned and not un­der­pinned by ef­fect­ive mass trans­it or in­fra­struc­ture. “The level of job sprawl in De­troit is stag­ger­ing,” says Bruce Katz, an urb­an ex­pert at the Brook­ings In­sti­tu­tion. “About 80 per­cent of the jobs are loc­ated more than 10 miles away from the cent­ral busi­ness dis­trict. The av­er­age for the coun­try is about 40 per­cent.”

The In­form­a­tion Age char­ac­ter­ized by hy­per-con­nec­ted­ness and com­pet­i­tion among cen­ters of in­nov­at­ive activ­ity has, iron­ic­ally, ten­ded “to re­ward those places where in­nov­a­tion hap­pens in closed spaces,” Katz says. The more in­teg­rated and “thick­er” the eco­nomy — the more densely layered it is with an ag­glom­er­a­tion of com­pan­ies and re­search­ers — the great­er the re­wards. Just last week, the Na­tion­al Sci­ence Found­a­tion pub­lished a re­port con­clud­ing that a quarter of all Amer­ica’s sci­ent­ists and en­gin­eers live in just five met­ro­pol­it­an areas in Cali­for­nia, New York, and Texas.

In­ter­est­ingly, the new metro age once again puts the U.S. at a com­pet­it­ive ad­vant­age with the world, Katz says. “In part, our suc­cess is that we are the quint­es­sen­tial met­ro­pol­it­an na­tion — more met­ro­pol­it­an than Europe or rising coun­tries like China or Brazil. Even in Europe, it’s a smal­ler por­tion of the pop­u­la­tion that lives in cit­ies, though they are urb­an­iz­ing now.”

HEEDING DOLLY PARTON

Urb­an ex­perts say it’s im­port­ant for city plan­ners to get the prop­er blend of in­vest­ment and re­sources for each par­tic­u­lar city and metro area, be­cause each has a unique pro­file. “Dolly Par­ton, a great eco­nom­ist, once said, ‘Find out who you are, and do it on pur­pose,’ ” Katz jokes. That ap­plies to cit­ies as well, which are con­stantly over­reach­ing in their ef­forts to re­in­vent them­selves — and grow fast. Every­one, it seems, wants to be the next Sil­ic­on Val­ley, and that won’t work. The rush to build cluster-like in­dus­tri­al or re­search parks can mis­fire if the right com­bin­a­tion of in­vest­ments isn’t achieved. “Sixty to 70 per­cent of clusters fail; even if you do build them, it can take 20 years to find out,” says Jonath­an Wo­et­zel of the McKin­sey Glob­al In­sti­tute, who re­cently coau­thored a re­port called “How to Make a City Great.”

One ad­mon­it­ory tale is the rise and re­l­at­ive de­cline of Re­search Tri­angle Park, the vast com­plex that lies between Raleigh, Durham, and Chapel Hill in North Car­o­lina. Con­sidered state-of-the-art think­ing when it was built in 1959, the park helped to bring North Car­o­lina in­to the In­ter­net age. But its vis­ion­ar­ies failed to keep pace with the new cachet of cit­ies. IBM sold its com­puter busi­ness, and jobs moved out. Worst of all, it be­came un­cool. “The cur­rent gen­er­a­tion of tech work­ers doesn’t want to toil in the soul­less Of­fice Space com­plexes sur­roun­ded by moats of park­ing that dot Re­search Tri­angle Park’s sprawl­ing vast­ness,” wrote Ly­dia De­pil­lis in The New Re­pub­lic last year. Now the park is try­ing to give it­self a new “urb­an liv­ing” im­age in an at­tempt to achieve more “dens­ity.”

“Over the past couple of dec­ades, what we saw were a lot of cit­ies that were copyc­at­ting, es­sen­tially,” Katz says. “They were par­tic­u­larly fo­cused on the con­sump­tion eco­nomy: sta­di­um build­ing, con­ven­tion-cen­ter ex­pan­sion. You’d go from one city to an­oth­er and see pretty much the same thing. What they wer­en’t fo­cused on was the por­tion of their eco­nomy that drives everything else. What goods do you make? What do you trade, who do you trade with, both do­mest­ic­ally and glob­ally?”

Sta­di­ums and big-league teams add al­lure, but the more sus­tain­able need is for “eco­nom­ic garden­ing” for grass­roots growth, Wo­et­zel says. Let the private sec­tor make most of the de­cisions, and don’t suc­cumb to the tempta­tion to over­plan. Above all, don’t stray too far from your city’s rais­on d’etre. “In Kan­sas City, the city fath­ers and moth­ers are em­bar­rassed about the im­age of a cow town, and they run away from it, which is ab­so­lutely ab­surd,” Funk­houser says. “The reas­on for Kan­sas City’s ex­ist­ence is that it was as far north as you went to put cattle in­to cars to go to Chica­go,” where they were slaughtered. As a res­ult, today Kan­sas City is a lo­gist­ic­al hub, with the second-largest freight-rail sys­tem in the coun­try after Chica­go. And that, Funk­houser says, is also the source of its fu­ture vi­ab­il­ity. “In­stead of run­ning around try­ing to cre­ate en­ter­tain­ment dis­tricts and things like that, the live­stock, ag­ribusi­ness stuff ought to be what they fo­cus on. On one hand, you want di­versity. On the oth­er hand, you don’t want to do a whole lot of ‘me-toos.’ What is your nat­ur­al strength? One of the cri­ti­cisms of Mi­chael Bloomberg in New York was how much he em­braced Wall Street. Well, hell, that is the main driver of New York City’s eco­nomy.”

May­or Smith of Mesa says city plan­ners must res­ist the tempta­tion to simply fol­low the most glam­or­ous trend. “There was a time when bio­med was pop­u­lar,” he says. “If Mesa went after bio­med, that would be a fool’s er­rand be­cause we don’t have bio­med.” In­stead, Smith set about fig­ur­ing out what his city’s or­gan­ic growth cen­ters were and came up with a bump­er stick­er: HEAT, which stands for health care, edu­ca­tion, aerospace, and tour­ism and tech­no­logy. He de­cided his city should try to at­tract small lib­er­al-arts col­leges of the kind that are still too rare in the South­w­est.

Healthy growth should also be well paced. Growth that hap­pens too fast can lead to prob­lems such as Beijing’s hor­rif­ic air pol­lu­tion or to the kind of un­gov­erned sprawl that out­paces in­fra­struc­ture or mass trans­it. That even­tu­ally frag­ments urb­an areas, as happened in De­troit. Port­land, Ore., con­sidered by many to be a mod­el of how to take an old city in­to a new era, has even con­tro­ver­sially laid down a “re­gion­al growth bound­ary.” True, Port­land had the luck of be­ing situ­ated between the  Sil­ic­on Val­ley and Seattle — and the leg­acy of headquar­ter­ing In­tel and Tek­tron­ics — but it also de­veloped a vis­ion for sus­tain­able de­vel­op­ment and ex­port strategies with Asia.

Brooks says the obstacles hold­ing back growth can some­times be as simple as get­ting the city charter right. “The De­troit city charter is very dif­fer­ent from oth­er charters. It’s very spe­cif­ic about what is re­quired by the city gov­ern­ment and what can’t be done,” he says. “For ex­ample, it’s very dif­fi­cult to con­tract out its ser­vices. The charter doesn’t al­low that. That con­strained the flex­ib­il­ity of the city gov­ern­ment. Gov­ern­ments have to be nimble.”

THE SECRETS OF SUCCESS

The Na­tion­al League of Cit­ies’ Brooks and oth­er urb­an ex­perts point to four in­gredi­ents es­sen­tial to met­ro­pol­it­an suc­cess.

Con­sist­ent vis­ion. Be­cause suc­cess­ful city plan­ning can take dec­ades to pan out, pa­tience and stead­i­ness are re­quired. Con­sider Chat­tanooga, Tenn., where its lead­ers are still put­ting in place a 45-year plan that has trans­formed the city from one of the most pol­luted in Amer­ica to a highly liv­able and sought-after place, at­tract­ing huge amounts of for­eign in­vest­ment. Today be­lea­guered cit­ies such as Clev­e­land, once de­rided as “the mis­take on the lake,” are pur­su­ing new strategies. For Clev­e­land, it is to be­come the “green city on a blue lake,” as its “Sus­tain­able Clev­e­land 2019” strategy puts it.

Lead­er­ship. Hand in hand with vis­ion comes lead­er­ship that is con­sist­ent and pub­lic-minded. Above all, as in the case of Chat­tanooga and Port­land, a city must have a strong cul­ture that pro­motes such lead­ers in  the private and pub­lic sec­tors. New York has avoided the im­age of a has-been city and re­mained the most com­pet­it­ive be­cause its may­ors are con­stantly re­in­vent­ing it, as Rudy Gi­uliani did with his tough an­ticrime agenda and Mi­chael Bloomberg has done by in­vest­ing in R&D and “green” in­nov­a­tion.

Pub­lic-private part­ner­ships. Busi­ness, civic, and gov­ern­ment lead­ers must act as a team. In Pitt­s­burgh, for ex­ample, phil­an­throp­ic ef­forts by the Carne­gies and the Mel­lons helped the city enorm­ously in mak­ing the trans­ition from Rust Belt steel city to edu­ca­tion­al and med­ic­al hub.

Re­gion­al think­ing. This is the new sine qua non for cit­ies. In the fu­ture, none will suc­ceed without it. Like Toledo’s Bell, Col­or­ado Gov. John Hick­en­loop­er, when he was may­or of Den­ver, cre­ated a “caucus” of more than 30 area may­ors who met reg­u­larly and helped jointly de­vel­op a re­gion­al light-rail sys­tem. Of­fi­cials be­hind the Great­er Hou­s­ton part­ner­ship have made sim­il­ar ef­forts. “You can de­vel­op re­gion­al col­lab­or­a­tion in lots of ways,” Funk­houser says. “Tax-base shar­ing, shared-ser­vices agree­ments. But, primar­ily, it really starts with the re­la­tion­ship between elec­ted lead­ers. They have to be on the same page. Cit­ies and metro areas are gov­erned es­sen­tially as a re­gime.”

All these factors can breed a crit­ic­al sur­viv­al trait for suc­cess­ful cit­ies and their metro areas: re­si­li­ence. Con­sider the con­trast­ing ex­amples of Stock­ton, Cal­if., and Char­lotte, N.C. Stock­ton filed for Chapter 9 bank­ruptcy a year be­fore De­troit did, a vic­tim of too much de­pend­ence on one in­dustry — con­struc­tion — that col­lapsed in a mat­ter of months after the subprime-mort­gage-gen­er­ated fin­an­cial crash in 2008. In Stock­ton, des­cend­ants of Cali­for­nia’s ag­ri­cul­tur­al work­ers flocked to home-con­struc­tion jobs, build­ing houses for middle-class fam­il­ies who worked an hour or two away in the San Fran­cisco Bay Area. The city boomed. But that in­dustry dis­ap­peared vir­tu­ally overnight, and Stock­ton had noth­ing to re­place it. Today it is a night­mare of boarded-up down­town build­ings and rampant crime.

As the home to two ma­jor banks — Bank of Amer­ica and Wachovia — that made dis­astrous choices dur­ing the subprime bubble, Char­lotte was also hard-hit. But the city has come out of it strongly. Like Min­neapol­is-St. Paul, Char­lotte is a far more eco­nom­ic­ally di­verse city than De­troit, with a lot of civic sup­port from its cit­izens, and its gov­ern­ment has in­ves­ted heav­ily in in­fra­struc­ture (former May­or An­thony Foxx just be­came Pres­id­ent Obama’s Trans­port­a­tion sec­ret­ary). Ul­ti­mately, des­pite its trav­ails, Char­lotte was se­lec­ted over sev­er­al oth­er fi­nal­ists (in­clud­ing Min­neapol­is-St. Paul) to host the 2012 Demo­crat­ic con­ven­tion.

There is al­ways room for im­prove­ment, as all those self-con­scious, self-doubt­ing Twin Citians know all too well. Min­neapol­is-St. Paul still has many prob­lems, some of them caused by the ex­odus from De­troit. It suf­fers an un­usu­ally high “achieve­ment gap,” for ex­ample, between its black and white pop­u­la­tions. On this point, the Taleb thes­is on fra­gil­ity will be sorely tested in MSP: How will a metro area that was once largely Scand­inavi­an and West­ern European in eth­nic char­ac­ter handle a large in­flux of His­pan­ics and blacks?

But cit­ies are hardy creatures. There may even be hope for De­troit, if it sur­vives its bank­ruptcy. Thanks to the city’s eco­nom­ic plight, rent­al rates in De­troit’s down­town core are su­per low, and that is already fos­ter­ing a boom­let of en­tre­pren­eur­i­al busi­nesses. A re­new­al of civic pride, and a new re­gion­al ap­proach be­gun by former May­or Den­nis Arch­er — lead­ing to the con­struc­tion of a bridge across the De­troit River to Canada — is help­ing as well. “De­troit is like an un­der­val­ued stock,” says Brook­ings’ Katz. “I think the core is go­ing to come back a lot faster than people think.”

Yet in the end, if a new De­troit is to rise, it will have to em­brace a very dif­fer­ent fu­ture. It will have to go me­di­ev­al.

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