Chicago Stealing from Poor, Giving to Rich. By Walter Russell Mead. Via Meadia, October 22, 2013.
Mead:
Chicago,
like New York City, is becoming a microcosm of California, a two-tiered society
where public policy props up and privileges the tastes of the rich while
ignoring the needs of the poor. A new piece in City Journal explains that Mayor Rahm Emanuel’s ostensibly painful
and difficult cuts to services like public safety and schools are actually more
like a diversion of funds from blighted residents to wealthy ones. Hundreds of
millions of dollars have been used to fund a bike share program, a “riverwalk”,
a hiking trail, and (what else?) a sports arena, even as Chicago public education and law enforcement sectors are facing deep crises.
City Journal
explains that Mayor Emanuel is relying on something called Tax Increment
Financing (TIF) subsidies to fund upper-class projects at the expense of basic
social services, in the hopes of luring in new wealthy residents and keeping
the ones who are thinking about moving:
Chicago’s
TIF program has long been criticized as a mayoral slush fund. Ostensibly a tool
for redeveloping blighted neighborhoods, TIF enables any new tax dollars
generated in a district—the so-called “increment”—to be fed back into a special
fund that can only be spent in that district. This projected revenue stream can
be used to back bonds to finance infrastructure and jump-start development. At
least, that’s the theory. Many of Chicago’s most prosperous neighborhoods are
located in TIF districts and have generated huge incremental revenues. The
Central Loop TIF district took in nearly $1 billion over its lifetime. When the
district was slated to expire due to a statutory sunset, the city created the
giant LaSalle Central TIF—covering a booming part of the West Loop—to replace
it. None of the taxes from new developments in these districts flows
automatically to police, libraries, parks, or schools. The funds go into the
city’s TIF account, and the mayor has discretion on how they’re spent. Some TIF
funds have been used for construction of new schools, but more than half have
been handed out as subsidies to private businesses. The true purpose of
Chicago’s TIF districts—which now take in about $500 million per year—appears
to be tending to high-end residents, businesses, and tourists, while insulating
them from the poorer segments of the city.
Chicago
is clearly afraid of sharing Detroit’s fate: losing wealthy residents and their
sizable tax dollars. Mayor Emanuel is banking on the hope that keeping the rich
folk happy will provide enough revenue over the long run to fund the social
services that the less fortunate depend on. This is a big gamble: if the $100
million waterfront boardwalk and $54 million biking trail turn out to be boondoggles
that do nothing for the one percent, the closure of dozens of public schools
and thinning out of a police force during an internationally famous murder
epidemic will be difficult to defend. Our guess is that Chicago will continue to hemorrhage the residents it has faster than it can attract high-income new
ones.
But if
it pays off, Chicago will approach something like Mayor Bloomberg’s New York.
Under Bloomberg, New York thrived as the “Luxury City,” home to a small
contingent of super rich, accompanied by a large, struggling servant class.
It’s possible, if not always easy, for these two groups to coexist, but the
high taxes, regulations, and high cost of living have driven the middle class
out in droves. The cutting edge of blue urban policy, then, is catering to the
rich at the expense of the middle class.
Cutting
funds from schools, police, libraries, and parks while funding chic promenades
and trendy nature walks to mollify the rich is not what many blue city voters
think they’re voting for.
New York’s Blue Suicide. By Walter Russell Mead. Via Meadia, October 15, 2012.
Well-Heeled in the Windy City. By Aaron M. Renn. City Journal, October 16, 2013.
Rahm Emanuel splurges on amenities for the elite, while poor and middle-class Chicagoans suffer.
The gentry liberals. By Joel Kotkin and Fred Siegel. Los Angeles Times, December 2, 2007.
They’re more concerned with global
warming and gay rights than with lunch-pail joes.
Kotkin and Siegel:
After
decades on the political sidelines, liberalism is making a comeback. Polls show
plunging support for Republicans and their brand of conservatism among young,
independent voters and Latinos. But what kind of liberalism is emerging as the
dominant voice in the Democratic Party?
Well,
it isn’t your father's liberalism, the ideology that defended the interests and
values of the middle and working classes. The old liberalism had its flaws, but
it also inspired increased social and economic mobility, strong protections for
unions, the funding of a national highway system and a network of public parks,
and the development of viable public schools. It also invented Social Security
and favored a strong foreign policy.
Today’s
ascendant liberalism has a much different agenda. Call it “gentry liberalism.”
It’s not driven by the lunch-pail concerns of those workers struggling to make
it in an increasingly high-tech, information-based, outsourcing U.S. economy –
though it does pay lip service to them.
Rather,
gentry liberalism reflects the interests and values of the affluent winners in
the era of globalization and the beneficiaries of the “financialization” of the
economy. Its strongholds are the tony neighborhoods and luxurious suburbs in
and around New York, Washington, Boston, San Francisco and West Los Angeles.
Just as
the number of industrial workers and traditional middle-class households has
declined, the ranks of the affluent class have grown. From 2000 to 2005, the
number of millionaires in the U.S. rose 26%. Meanwhile, households with incomes
of more than $100,000 a year were the most rapidly growing income category,
according to Ogilvy & Mather demographer Peter Francese. From 1994 to 2004,
the number of six-figure-income households jumped 54%.
Although
many of the newly affluent are – as is traditional – politically conservative,
a rising number of them are turning left. Surveys done by the Pew Research
Center indicate that an increasing number of households with annual incomes
greater than $135,000 – the nation's top 10% – are moving toward the Democrats.
In 1995, there were nearly twice as many Republicans (46%) as Democrats (25%)
in this category. Today, there are as many Democrats (31%) as Republicans
(32%).
The
political upshot is that Democrats now control the majority of the nation’s
wealthiest congressional districts, according to Michael Franc of the
conservative Heritage Foundation.
In
part, this is because the Democratic gains in the 2006 elections were in
affluent districts once held by the Republicans. In Iowa, for instance, the
three wealthiest districts now send Democrats to Washington, and the two
poorest are safe Republican seats.
Perhaps
the best indicator of the growing political power of gentry liberals, however,
is their ability to generate campaign contributions. Chiefly drawing on Wall
Street, Hollywood and the Silicon Valley, this year's Democratic presidential
candidates have raised 70% more money than their GOP counterparts, according to
the Wall Street Journal. The securities industry, which awarded Republicans 58%
of their campaign dollars in 1956, gave the GOP only 45% in 2006. In the newest
sectors of the securities industry, most notably hedge funds, Democrats are
favored. This year, hedge fund managers have given 77% of their contributions
to Democrats in congressional races, reported the Journal.
Gentry
liberalism is not an entirely new phenomenon. Its intellectual roots can be
traced to historian Arthur M. Schlesinger Jr.’s 1948 book, The Vital Center. Schlesinger himself was the archetype of the
gentry liberal. A product of Harvard University, he was as comfortable in the
fashionable precincts of Manhattan’s Upper East Side as he was advising
presidents in Washington. Schlesinger was suspicious of the traditional
liberalism of President Truman, who baldy appealed to the basic interests of
returning middle- and working-class veterans of World War II.
In The Vital Center, Schlesinger dismissed
both the then-largely Republican business class, as well as mainstream
Democratic politicians like Truman, because he thought they were too craven in
their appeals to middle- and working-class interests. He believed that government
should be in the hands of “an intelligent aristocracy” – essentially men like
himself – whose governance would be guided by what it considered enlightened
policy rather than class interests.
Since
the 1960s, the intellectual class epitomized by Schlesinger has grown many
times over. Academic liberals have become something of a political power in
their own right. College campuses constituted the largest single base of
contributors to the 2004 presidential campaign of Sen. John Kerry. Professors
are among the highly compensated and pampered professional cadres of the
knowledge economy – which also includes lawyers, engineers, doctors, wealth
managers, investors and other educated professionals – that make up the ranks
of gentry liberalism and flatter the politicians who advocate its positions.
Gentry
liberalism has established a strong presence on the Internet, where such
websites as MoveOn.org and the Huffington
Post are lavishly funded by well-heeled liberals. These and other sites
generally focus on foreign policy, gay rights, abortion and other social
issues, as well as the environment. Traditional middle-class concerns such as
the unavailability of affordable housing, escalating college tuitions and the
shrinking number of manufacturing jobs usually don’t rank as top concerns.
But
gentry liberalism’s increasingly “green tint” distances it the furthest from
the values and interests of the middle and working classes. Leading gentry
liberals, whether on Wall Street, in Hollywood or in Silicon Valley, are among
the greatest scolds on global warming. They justifiably excoriate the Bush
administration for its overall environmental record, but some of them – movie
stars, investment bankers, dot-com billionaires – are quick to insulate
themselves from charges that their private jets or 20,000-square-foot vacation
homes in Nantucket spew prodigious amounts of carbon dioxide. Repentance
typically includes the purchase of carbon “offsets,” parcels of rain forests,
hybrid vehicles or solar panels.
The
gentry liberal crusade to tighten U.S. environmental regulations to slow global
warming could end up hurting middle- and working-class interests. U.S. industry
needs time and incentives to develop new technologies to replace carbon-based
energy. If it doesn’t get them, and an overly aggressive anti-carbon regime is
instituted, the shift of manufacturing, energy and shipping jobs to developing
countries with weak environmental laws and regulations could accelerate.
Ignoring
these potential Third World environmental costs would result only in shifting
the geography of greenhouse gas emissions without slowing global warming – and
at a terrible cost to jobs in the U.S.
The
ascent of gentry liberalism remains largely unchallenged, in part because of
the abject failure of the Republicans to address middle-class aspirations in a
serious way and in part because of the absence of a strong pro-middle-class
voice among Democratic presidential contenders, with the exception of former
Sen. John Edwards. As a result, Democrats are unlikely to stop, let alone
reverse, the current economic trend that dispenses major benefits to
gentry-favored sectors such as private equity firms, dot-com giants and
entertainment media.
Over
the last half a century, liberals have moved from strong support for basic
middle-class concerns – epitomized by the New Deal and the G.I. Bill – to
policies that reflect the concerns and prejudices of ever more elite interests.
As a result, neither party speaks for broad middle class concerns.
The nation
deserves better than that.
