Overselling localism is becoming an excuse to shed and shred federal responsibility

Our friend, and director of the Brookings Institution’s Metropolitan Policy Program, Amy Liu, weighs in with a timely commentary on the limits of localism. As regular readers of City Observatory will know, we’ve been concerned that the soaring rhetoric of those enamored of local solutions distracts attention from the way in which critical elements of the federal system are being dismantled. Chief among the proponents of localism have been Bruce Katz and Jeremy Nowak, authors of the book “The New Localism.”

Though she doesn’t mention Katz and Nowak by name (there is a link to an article they’ve written), Amy Liu lends her voice to those concerned about the limits of localism in her CityLab article “The limits of city power in the age of Trump.”  Her argument closely parallels the one we’ve made here:

. . . city boosterism can also go too far: Urging city leaders to go it alone celebrates a deep dysfunction in federalism—and it normalizes a self-destructive shift in politics and governance.

For instance, the Trump administration is using the narrative of increased local capacity to justify draconian cuts to federal support for cities, from transit programs, community development financing  to the entire Economic Development Administration.

We would hasten to add that likely cuts to social service programs, ranging from Food Stamps, to Medicare and Medicaid, and housing assistance will all amplify the problems faced by cities. In effect, the abdication of national responsibility for these core functions transforms these issues into “local” problems, ones that are disproportionately visited on some cities, and which in many cases are insoluble at the local level.

For reference, we’ve reproduced our original critique of The New Localism here.  We also invite our readers to read Bruce Katz and Jeremy Nowak’s response, which was published at CityLab.

We also want to take this opportunity to share with Bruce and the urbanist community our condolences for Jeremy’s passing. Jeremy was an intellectual force and an inspiration. He will be missed.

Why we’re skeptical of localism

As our name City Observatory suggests, we’re keen on cities. We believe they’re the right frame for tackling many of our most important problems, from concentrated poverty to housing affordability, from economic opportunity to more sustainable living. But enamored as we are of cities, we harbor no illusions that cities, by themselves, can solve our most pressing problems.

In the past year, a growing chorus of voices, disillusioned by growing polarization, has called for cities to be our saviors.

Take Richard Florida’s description of the latest of these “The New Localism.”

“In a time of national dysfunction and, frankly, gloom, our best hope for our society lies in our cities and metropolitan areas. That’s the message of the newly released book The New Localism, by Bruce Katz, the noted urbanist at the Brookings Institution, and Jeremy Nowak . . .”

In one of the oddest of imaginable odd couples, Florida himself co-authored a Daily Beast op-ed with perennial sparring partner Joel Kotkin, that called for us “To reunite America, liberate cities to govern themselves.”  The article effectively concedes that the divisions between the blue places and the red ones are irreconcilable, and each ought to be free to go its own way.

With control of the national government in the hands of a president of debatable competence and a Republican party seemingly intent on dismantling the federal government, it’s not surprising that many people are looking for reassuring alternatives. Hoping cities can save the day Is in many respects an effort to make a virtue of necessity. Katz and Nowak relate a litany of instances of Mayors and other civic leaders working above or across partisan and sectoral divides to tackle important problems their cities face.  Their approaches are refreshingly innovative, direct and often productive.

The productivity of these cities is equally attributable to the pragmatism of their leaders and the solidly blue political compositions of their polities. Large US cities are overwhelmingly blue. And to the extent you find Republicans in cities, they tend to be the most moderate kind. If you’re a Democrat, you find yourself wishing that all Republicans were like Mick Cornett or Michael Bloomberg.

There’s an understandable impulse in the face of growing national divisions and what for many was the shocking and unpleasant outcome of the 2016 national elections to retreat to a comforting cocoon of the like-minded. Blue cities will do all the things that a solidly Republican national government won’t do: respect LGBTQ rights, provide sanctuary for immigrants, denounce climate change, and tax themselves to pay for needed investments and public services. But withdrawing to the safety of agreeable blue localities cedes the important national battle at just the time when it needs to be contested.

It is well and good to celebrate the successes that mayors and local leaders are having. But transforming these heartening but small successes into a sweeping call for a new localism is misplaced when the fundamental functions of the national government are being steadily undermined. None of this works in a world in which the federal government is not simply rending holes in the safety net but knocking down its foundations.

We should remember that the federal government took on the roles it did almost entirely as a last resort. As Churchill reputedly remarked, “America can always be counted on to do the right thing, but only after it has exhausted all the other alternatives.”  While the rest of the world’s nation states adopted the trappings of modern social democracies, the U.S. was late to implement things like unemployment insurance, social security and universal health care. The New Deal, the Great Society and Obamacare were only enacted after various local and state programs to address these problems were simply overwhelmed.

What cities do badly or can’t do at all

Cities are not merely ill-equipped to tackle our major challenges on their own. Localism has an undeniable history of making many problems worse. Take two big issues of our time:  climate change and surging inequality. Mayors and cities can strike a pose and demonstrate effective tactics, but they lack the policy throw-weight to solve these problems.

Bravo for mayoral pledges to adhere to the Paris accords, but there’s precious little substance and sufficient scale. New York Mayor Bill de Blasio can sue the oil companies but is an ardent opponent of congestion pricing, a tangible, effective market-oriented step that would reduce the number one source of greenhouse gases. It’s almost impossible to imagine that we’ll take effective action to address climate change unless it’s done at a national level in cooperation with the rest of the world. Without a federally imposed carbon tax or cap and trade, localized efforts are likely simply to relocate the dirtiest pollution to the most permissive states.

Similarly, inequality—which has been dramatically worsened by changes to the federal tax code—dwarfs anything cities can do. Cities are constitutionally incapable of redistributing income because the wealthy have the option of exit (which they have regularly done.) Witness the exodus to suburban enclaves, a trend Robert Reich has termed the secession of the successful. Similarly, states and cities have been largely powerless to take on large corporations. Not only has globalization moved a considerable part of corporate earnings beyond the reach of state and local tax collectors (note Apple’s relocation of its profits to Ireland thanks to U.S. tax laws), but look at the way states and cities are falling over one another to offer tax holidays and subsidies to Amazon for its proposed HQ2.

It’s also worth noting that a key aspect of localism that has been effectively exempt from federal control—local control of zoning and land use—has worsened the economic segregation of our nation’s metropolitan areas.  In sprawling metros, separate suburban cities have used the power of land use regulation to exclude apartments, directly contributing to the problem of concentrated poverty that intensifies and perpetuates the worst aspects of income inequality. Cities have been implicated in the nation’s housing affordability and segregation problems, but that’s hardly mentioned in Katz & Nowak. The word “segregation” appears only once in the book (page 40). The word “zoning” occurs on 8 pages. Housing affordability is mentioned just once (page 28).

The root of the problem here is too much localism. The most localized governments have the strongest incentives to exclude neighborhood groups within cities lobby against density. Suburbs within metropolitan areas do the same. Only larger units of government have the incentives and ability to challenge this kind of parochialism. Notably, two initiatives of the Obama administration–HUD’s affirmatively furthering fair housing rule and the Council of Economic Adviser’s critique of local zoning–represented important national steps pushing local governments to confront this issue. Both are going nowhere under the current administration.

Assume we have a can-opener: Cities can’t do this without a strong federal government.

The danger here is that these calls to renewed localism effectively aid and abet the ongoing efforts to systematically dismantle federal programs.  The clarion call to act locally diverts our political attention from the national stage and perhaps, unwittingly, becomes an excuse to stand by and watch these foundational programs be destroyed. Katz and Nowak briefly address this question of the federal role early in their book:

“. . . the devolution of power and problem solving to local levels is not an argument against the importance of federal and state governments.  . .  The federal government must do things that only it can do, including safeguarding national security, providing a stronger social safety net than it presently does, providing guarantees of constitutional protections and civil rights, making smart national infrastructure investments, protecting natural resources, protecting the integrity of markets and funding scientific research, innovation, and postsecondary education to keep the nation competitive.” (Katz & Nowak, page 10).

Oh, is that all? This caveat swallows the book’s premise. Localism will work brilliantly–provided we have an extraordinarily competent, generous, fair and functional federal government.

In effect, it’s a reprise of the classic economics joke about the physicist, chemist and economist, trapped on a desert island with cases of canned food but no way to open them. The chemist proposes evaporating seawater into a potent brine and letting the salt solution rust the cans open. Too slow, says the physicist, who works out the exact angle from which to drop the cans onto sharp coral and cause them to split open. The economist waves them both away and says, “I have a simpler, much more elegant solution.  Let me explain:  First, assume we have a can-opener . . ”

A competent, generous, fair and functional federal government is the can-opener.

One more point should be made: Many of the innovative city strategies celebrated in this book are directly dependent on the ability of mayors and city institutions to tap into federal largesse. Take Pittsburgh, heralded as an exemplar of local innovation. Katz and Nowak acknowledge that Carnegie Mellon and the University of Pittsburgh receive more than $1 billion in federal research funding annually (page 75). Cities looking to exploit an “eds and meds” strategy can’t do it without huge federal support in the form of research grants, student aid, Medicare, Medicaid and the Affordable Care Act. A federal government that defunds these programs—as seems likely because of the new tax reform law—will make it all but impossible for cities to innovate.

Laboratories, not factories

Katz and Nowak marshal an impressive list of inspiring local innovations from cities, such as Indianapolis, Chattanooga, Oklahoma City and St. Louis. Mayors and civic leaders in these places are generally pragmatic and entrepreneurial and are developing solutions that cut across partisan and ideological lines. Cities are, as the saying goes, the laboratories of democracy. But for the most part, they are the small-scale, bench-test laboratories for incubating ideas and showing that they can work at a municipal scale. Implementing these ideas at a national scale is essential to their success.

The key lesson of policy experimentation is that while ideas can be tested and refined at the state or local level, they ultimately need to be national in scope. States experimented with minimum wage laws, unemployment insurance, and old age pensions, but none of these were began to address our problems until extended nationwide in the New Deal.

For a long time, we could take the federal government more or less for granted.  There was no hope that it would ride to the rescue, but at least it would keep doing what it had always done: cashing social security checks, bankrolling medical care for the poor and aged, enforcing a minimum of civil rights everywhere, engaging seriously with the rest of the world on global issues. Now, every one of those fundamental roles is very much in jeopardy.  If the poor lose health care, are turned out of subsidized housing, see their education prospects dim, that will directly add to the costs burdening states and cities. The pressure to fill in for a diminished federal presence will greatly handicap local innovation.

Like Localism? Time to fight for an effective national government

If you care about cities and believe local initiative can lead to solutions, you need to be marching on Washington and fighting for a federal government that does its job well.  The hollowing out of the federal government now underway is the clearest threat to creative, effective localism. Ultimately, the magic of our federal system is that both national and local government have important and complementary roles to play. It’s not either/or. It is both/and. Innovative cities require a supportive federal government.

Rather than turning their backs on the federal government and national debates, cities and civic leaders ought to be pooling their energy and efforts to kindle a new dialog about how we appropriately divide responsibilities between national and local governments. We must insist that the national government do its job well and that it provide the room and in some cases some of the resources to help cities tackle problems at a more local level. We need a 21st century federalism that envisions strong and mutually supporting actions at both the national and local levels, not a retreat to homogenous but balkanized localities.