Thursday, July 16, 2009

Our Cities are Murdered by Federal Policy:Cities Lose Out on Stimulus Funds

The allocation of federal "economic stimulus" funds under Obama's stimulus package is a case study in the tendancy of overly centralized authorities to misallocate money and resources from those who paid for them, are most needy of them, and can best utilize them, to unproductive and wasteful uses and economic dead ends.

Since World War Two, public policy at the federal and state levels alike has constituted one long economic assault on our major cities in favor of remote rural areas that are sparsely populated and supply a fraction of the tax revenues to either the U.S. treasury or state coffers. For the past 60 years, the old industrial powerhouses of the northeast and midwest- New York City, Chicago, Detroit, St. Louis, Newark, Boston, Gary, Indianapolis, Milwaukee, Pittsburgh, and other centers of industry and commerce, with their advantageous locations on major waterways and proximity to fertile hinterlands- have been quite systematically plundered to fund projects that were designed to empty them of population and rob them of the wealth they generated, to build cities in the desert and to steer the population from city centers to remote, auto-dependent suburbs. Their wealth funded the interstate highway system that destroyed their physical cohesion and funneled their population to remote auto-dependent suburbs,and to cities that would scarcely exist without this massive auto subsidy, as well as to the pharaonic water diversion projects funded by the country at large so as to make life possible in climates that would otherwise be unfit for human habitation, such as the deserts of the Southwest.

The allocation of federal transportation stimulus funds is following this destructive tradition. According to an analysis by the New York Times, while two-thirds of our citizens live in the 100 largest metropolitan areas and three quarters of the nation's economic activity takes place in them, these cities and their metropolitan areas are getting less than half of the funds from the pot of transportation stimulus money provided by Obama's stimulus package.

The article quotes Owen D. Gutfreund, an assistant professor of Urban Planning at the City University of New York and author of 20th Century Sprawl: Highways and the Reshaping of the American Landscape: “We have a long history of shortchanging cities and metropolitan areas and allocating transportation money to places where few people live.” This is no doubt due to the bias that Americans have against urban life even though that is the life that most of us live.

Thus, the wealth of the country is being diverted from the people and places that produce it to places that produce very little, for just as most of our population lives in major metroplexes, most of our economic activity takes place in them and most of our tax revenues are generated by them. Taxes paid by Chicago and New York City, two of the nation's largest taxpayers, as well as other major urban areas, have been diverted away from these places to places that produce very little activity or tax revenues.

In this fashion, urban areas are forced to subsidize their own destruction. As cities lose federal taxes they have paid to underpopulated areas, they are forced to raise taxes and fees stseeply at the local level to offset the loss, which is one of the reasons that New York City, Chicago, and other large cities are burdened with such steep local taxes. This is not to dismiss the role of political corruption here in Cook County as a driver of expenses and taxes, but there can be no doubt that the routine fleecing of our major cities for the benefit of first, the suburbs, and then of sparsely populated states that contribute little in taxes, has been a major factor in the decimation of our older cities.

This destructive process is replicated at the state level, as most of the stimulus funds are given to the states, which tend also to allocate disproportionate benefits to sparsely populated rural counties at the expense of the large towns and cities that contain most of the population, generate most of the tax revenues, and have the greatest need of the road funds due to their congestion and heavy traffic.

Additionally, the power of our authorities to allocate vast sums of money at their total discretion has created a highway system of such a size as to be economically unsustainable in the best of times; 5.7 million miles to be exact. While most people view such an "accident" as the collapse of the interstate bridge in Minneapolis as an isolated event, it should really be regarded as the "canary in the coal mine", a sign of early-stage system failure which will become unmaneagable and catastrophic as we struggle to work out trillions of dollars of bad debt against a backdrop of a contracting economy and permanent fossil fuel depletion.

And these failures will be much costlier and effect the lives of many more people because they will be taking place in the cash-starved urban centers that are being robbed of the wherewithal to maintain their highways, roads, sewers, water mains, and other essential infrastructure as well as lifeline services such as police and fire protection. Worse, while a bridge failure, say, in a remote county with a population of 20,000 people is surely a tragic event, infrastructure failure in a city like Chicago can mean millions of people exposed to injury, disease, and death as essential systems fail.

The surest corrective to the anti-urban policies of the past 60 years would be restore the free market to endeavors that have usually been considered the proper purvue of government authorities, such as the financing and construction of limited-access high-speed roads and bridges, while limiting government authority to surface roads necessary for basic transport. Starting now, we could fund interstate repairs by means of tolls, and roads that did not generate sufficient toll to pay their maintenance costs could be triaged, or reduced in width to those lanes necessary to facilitate the maintenance of the electric grid.

But that will take a long time if ever we can make it happen. So the only thing we can do in the meantime is to light fires under our elected officials, from our senators and congressional representatives in Washington D.C. and the state house, and pressure them to work for the people who elected them and make sure that the Chicago area gets its fair share.

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