Commentaries

Urban Abandonment

America’s cities are in trouble. And desperately needed help may not be on the way. Will America’s cities turn into cauldrons of poverty, desperation and fear? Or will we revive our cities and rebuild the broad middle class in the process.

Cities got hit by a double blow in the Great Recession. The financial collapse punctured housing and commercial building values. This came on top of a decade long manufacturing recession that turned into a rout – with some two million manufacturing jobs lost since the recession began.

For cities, that translates into high unemployment. Teenage unemployment is at the highest level since they began collecting statistics. Urban black males are looking at unemployment rates beyond depression era levels of 30% or more.

With the loss of jobs and loss of property values, city budgets face severe shortfalls. These will get worse. Property assessments for taxes lag behind the fall in values – revenues will fall over the next two or three years. Moreover states now face staggering deficits – estimated by the Center for Budget and Policy Priorities at $370 billion this year and next. They will cut back dramatically on grants to the cities as they struggle to balance their own accounts.

The resulting budget crisis coincides with rising needs. The recession and manufacturing depression is producing growing hunger and homelessness in US cities. The US Conference of Mayors reported record levels of both in 2009. So many people are relying on food pantries and emergency kitchens that 25% of the demand goes unmet. Tent cities and homeless encampments are spreading, and squatters are taking over homes that have been foreclosed.

Some 36 million Americans are on food stamps. A report in the Archives of Pediatrics and Adolescent Medicine concludes that about one-half of all US children will relay on food stamps during some portion of their childhood. For black children, the figure is a stunning 90%.

Things will get worse before they get better. Faced with severe budget shortfalls, cities are laying off police and fire fighters, putting off needed infrastructure projects, imposing fees for services. 250,000 teachers across the country are facing layoffs this coming school year. Cities are ending summer programs, cutting after-school programs, athletics, and art. Libraries are being shuttered. Sewers are going unrepaired. Clean water will be more endangered.

The Recovery Act spending helped cushion the crisis over the past year, but now that spending is running out. And the Congress is frozen. Republicans not only oppose any new action to help cities and states, they urge repealing what is left of the Recovery Act spending. Conservative Democrats oppose any spending that isn’t “paid for,” and then join Republicans in opposing tax hikes on the wealthy that could pay for it. Trillions were mobilized to save the biggest banks from the ruin they created. Homeowners, the poor, the cities are told to tighten their belts.

This is a recipe for a grim and impoverished time. City and state layoffs will undermine any recovery. Hunger and homelessness will spread. Inequality will grow worse. The lack of jobs will feed desperation, shatter hopes.

We need bold vision now. We need an urban policy that will rebuild our cities and put people to work. Establish an urban corps to “green” our cities, rebuilding parks, planting trees, tutoring children. Create the green bank to finance weatherization of commercial buildings. Crate an infrastructure bank to finance new infrastructure – from mass transit to much needed school and sewage rebuilding. The federal government should provide aid to strapped cities and states to avoid layoffs that will simply make things worse.

But Congress is focused not on unemployment and jobs but on deficits and debt. This makes no sense. The irony of this time is that America can borrow long-term at interest rates near record lows. There is no inflation in sight, and won’t be with unemployment this high. Public investment won’t “crowd out” private investment; it can help mobilize private investors by providing loan guarantees to pension funds.

There are two ways out of a collapse like this. Strong countries that face the future with confidence will borrow money and invest, put people to work, get the economy moving while banks get healthy, and then balance the federal budget once the economy is moving again. The frightened and the pessimistic will be scared of such vision, and choose to balance federal budgets up front, let the recession run, let businesses collapse, homes go into foreclosure, families into poverty and bankruptcy. Eventually, new efforts will rebuild from the ruins. The problem is the agony that is masked by that “eventually.” Unless Washington changes course, we are about to discover just how great that can be.

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