Chicago is broken — and Democratic ideas can’t fix it, at least at the local level. That’s one takeaway from John Judis’ recent article in the National Journal. Judis, one of America’s most thoughtful leftists, looks at the city’s mayoral runoff between Rahm Emmanuel and Jesus “Chuy” Garcia, and finds both candidates lacking in solutions for city’s gargantuan problems. Those problems include deeply underfunded pensions, a decline in low-skilled jobs, and a dramatic gap in wealth, employment, and educational attainment between poorer (and often African American) residents and wealthier residents.
In facing these challenges, Emmanuel may be a better manager, but his policies marginalize the city’s poor and seem incapable of reversing the city’s fiscal slide. For example, on jobs and the economy, Garcia has argued that Emmanuel has favored development in the wealthy downtown area instead of poorer ones. But Garcia himself is short on alternatives:
In his debate with Emanuel, Garcia called for “attracting modern industry and manufacturing” to Chicago’s neighborhoods. If by modern industry, he means Yelp and LinkedIn, then the problem will be that these kind of firms want to locate near other financial and business services downtown. And if he means manufacturing on a scale that Chicago once enjoyed, the long-term trends in the local economy are running against such a strategy. As one head of an economic-development organization in a minority neighborhood told me, hopes of reviving manufacturing on a large scale are a “pipe dream.”
A similar dynamic exists on the pension obligations bankrupting the city government, which Rahm hasn’t fixed—but neither, it looks like, could Chuy:
Garcia, meanwhile, has proposed measures that, in Paul Green’s words, are “either illegal or impossible.” He has said he wants to impose a graduated state income tax, which is illegal under the state constitution and would require a constitutional amendment passed by a three-fifths vote in the state Legislature. (Garcia’s main backer, the Chicago Teachers Union, wants to impose a financial-transactions tax on city firms, which could drive one of the Chicago’s most important industries out of town.) Garcia has also said he opposes reducing pension benefits, which would put the onus of resolving the crisis entirely on taxpayers. In short, if there is a viable alternative to Emanuel’s approach, Garcia is not airing it.
Add all this up, and it’s likely that a European theme is going to be sounding in American politics in the future: reform for relief. That is, many Democratic, deep blue cities will be approaching state and federal treasuries with cap in hand for some time to come. First, because they don’t have the money to pay their bills, these cities will need help with exploding pension liabilities (and their pension problems are only going to become more urgent). Second, because their system has become unsustainable, they are likely to face gridlock at home. Black and Hispanic voters may be pulled apart rather than pulled together. Hispanics look like more of a conventional immigrant group wanting help from government aimed at promoting upward mobility, while the problems facing black Chicago may be more intractable. Competition over power and resources between these groups could be an important factor in the future of urban politics.
It will be increasingly up to the feds, then, to cope with the unfolding disaster. But that presents its own challenges. Congress is likely to have at least one GOP controlled house for some time to come, and, in any case, huge urban bailouts are not going to be particularly popular with suburban and rural voters. It would be inhumane, polarizing, and probably unwise to let the cities go to hell, but it would also be insane and politically unsustainable to keep pumping money into a broken system. The task will be to develop a reform agenda for urban management and pension issues so that appropriate trade-offs can be made: cities and workers get a hand, but the policies that led to this problem must change.
Figuring out how to manage this “relief for reform” dynamic is likely to be one of the big challenges in American politics. Where the dynamics of race relations get involved, this will be particularly sticky. But the fiscal issues are so large that we won’t have a choice. Fixing America’s cities so they can be sustainably prosperous is one of the biggest and most urgent jobs on our national to-do list.