https://www.nytimes.com/2023/09/13/opinion/cities-elites-baltimore-pittsburgh.html
AHiddenReasonCitiesFallApart
Sept.13,2023
ByThomasB.Edsall Mr.Edsallcontributesaweeklycolumnfrom Washington,D.C.,onpolitics,demographicsandinequalitySignupfortheOpinionTodaynewsletter Getexpertanalysisofthe newsandaguidetothebigideasshapingtheworldeveryweekday morning.Getitsenttoyourinbox.
Once-vibrantcitieslikeSt.Louis,BaltimoreandClevelandhavesufferedfrompoverty,crime,depopulation,socialdysfunctionand homelessnessfordecades setbackscompoundedbythedeclineofmanufacturing,thenationalizationoflocalbanksandwavesof corporateacquisitions
Butthereissomethingelsehurtingcitiesbesidesthosewell-knownphenomenathatwedon’ttalkaboutenough:theerosionofthelocal establishmentandthelossofcivicandcorporateelites
Untilthelate1970s,virtuallyeverycityintheUnitedStateshaditsownnetworkofbankers,corporateexecutives,developersandpolitical kingmakerswhodominatedtheirprivateassociations,golfcoursesandexclusivedowntownclubs
Thememberswereaffluentwhitemenwhowieldedpowerbehindcloseddoors,withoutaccountabilitytothecitizenry Foralltheir multiplefaults andthereweremany theyhadonethingincommon:asharedeconomicinterestinthehealthoftheircommunities.
IaskedMarkMuro,aBrookingsseniorfellow,aboutthesetrends,andherepliedbyemail:
Multiplefactors industryconcentration,thedigitalizationofbigbusiness,thedesirebycorporationsforhighlyeducated workersintheirheadquarters haveledtoapull-awayeffectwhereashortlistof“superstar”metrosaccumulatemoreofthe nation’sheadquarters,asbigfirmsconcentrateinbigmetros.Andthishasbeenaself-perpetuatingprocessinwhichthefortunate metroshavegainedthemostwhilemanyplacesareleftbehind.
Ineffect,Murocontinued,“thetopechelonofbig,educatedcitieshavesuckedinmoreofthepopulation,techjobsandheadquarters.”
Asaresult,
Manymetroshavelostpiecesoftheirleadership,andlostsourcesofthewherewithal,capital,know-how,andprestigeso importanttoadvancingregionalinitiatives,includingonestobolsterlocalprosperityandautonomy Allinall,thelossofcore corporateandotherinstitutionserodesthecapacityoftheregionsmostinneedofactiveworktomaintainandgrowtheir economicandsocialhealth.
RobertD.Atkinson,presidentoftheInformationTechnologyandInnovationFoundation,describedthelong-termseculartrendsinan emailtome:“Big‘anchor’corporationsplayedakeyroleinciviclifeinmetroareas,notjustintermsofcorporatedonationstononprofits butalsoinbringingtobearleadershiptorevitalizecities.ThisusedtohappenallthetimeinDetroit,Cleveland,St.Louis,theTwinCities, etc”
Theselocallybasedfirms,Atkinsoncontinued,“playedanimportantroleofhelpingthevariousmunicipalitiesinaregionworkmore closelytogether Banksandutilitieswereespeciallycriticaltothis,inlargepartbecausetheirsalesbasedependedonahealthyregional economy.”
AaronM.Renn,ademographerandco-founderofAmericanReformer,aconservativethinktankbasedinDallas,wroterecentlyin“The NeedforHomegrownUrbanLeaders”inGoverningmagazinethat“changesincitiesoverthecourseofthelast30to40yearshave greatlyunderminedlocalleadershipcultures.”
https://www.nytimes.com/2023/09/13/opinion/cities-elites-baltimore-pittsburgh.html
9/13/23, 3:27 PM Opinion | A Hidden Reason Cities Fall Apart - The New York Times
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Inthe1970sandbefore,Renncontinued,
Thebanksinmostcitieswerelocallyownedandwerelimitedbylawtotheirhomemarkets.TheirC.E.O.swereextremely powerfulbothintheircompaniesandcommunities Andtheirpersonalprofessionalincentiveswerealignedwiththoseoftheir locality Theonlywaytogrowtheirbanksorelectricutilitieswastogrowthecommunitywheretheywerebased Today,many C.E.O.sofonce-localcompaniesarebranchmanagersofglobalfirms.Theirjobistositonlocalboardsanddabbleincommunity relations,buttheydon’treallycalltheshotsanymore.
Theresult:“Civicleadershiphasbeenbureaucratized.”
Fewpeoplehavetrackedtheevolutionofacity’sestablishmentwithmoreattentiontodetailandconsequencesthanFrankA.DeFilippo,a formerpoliticalreporterforthenow-vanishedBaltimoreNewsAmerican,whowentontoworkforseveralMarylandtelevisionstations andpublications.
InDecember1967,DeFilippopublishedintheNewsAmericanagroundbreakingtwo-partseriesonBaltimore’sthen-powerful establishment,revealingtheinterlockingdirectoratesofthecity’sfivemajorbanks,thetwotoplawfirms,TheBaltimoreSunandthe city’smajorcorporations:
Describethembyanyname thePowerElite,theStatusSeekers,theOrganizationMen,theEstablishment aninbredand exclusivecliqueof133businessmenandlawyerscontrolsBaltimore,itsgovernment,itscommerce,itsculture,educationaland socialinstitutions.
Inturn,thisselectcorpsofinterlockingandoverlappingcorporateagentsisdominatedbyahalf-dozenmenwhoemergeatthe apexofthecity’spyramidicalpowerstructure
Morethanahalf-centurylater,DeFilippolookedbackonthefateofBaltimore’sestablishmentina2019essayforMarylandMatters, “WhenPowerbrokersRuledBaltimore”
“Today,thecaptainsofindustryandtheinstitutionstheyheadedareallgone,”DeFilippowrote “Thebanks,thelawfirms,theinsurance companiesandthemajorindustrieseitherdisappearedorweresubsumedbylarger,out-of-statelogos,or,asmanyoftheoldtitansfaded out,theheirsdecidedtocashin.”
TheBaltimoreSunwassoldtoout-of-towners,DeFilipponoted,and“thefivemajorbanks Mercantile,Equitable,FirstNational,Union TrustandMarylandNational wereallgobbledupbyout-of-statebehemoths.Andthecity’stwolargestlawfirms,Venable,Baetjer& HowardandPiper,Marbury,mergedwithevenlargernationallawfirms.”
TheBaltimoreestablishment,likeitscounterpartsinothercities,wasshotthroughwithconflictsofinterest,self-dealingandtheexercise ofpowerbyagroupcharacterizedby,inDeFilippo’swords,“akindofhand-me-downinbreeding”
Thesenegativeattributeswerecounterbalanced,atleastinpart,bythepluses:
Theaccumulationofpower,inthosedays,broughtwithitacertaincorporateresponsibilityandcivicobligation.Thedepartureof corporateBaltimore,onewayoranother,alsoledtothecollapseofcorporategivingandthesupportofcharitableandcultural institutionsasisevidencedbythefinancialsqueezeoftheBaltimoreSymphony
Itwasusuallythelocalbanksthatspearheadedcivicfund-raisingdrives,notonlyasadisplayofcivicgoodwillandcorporate citizenshipbutbecauseitwasgoodbusiness.Andthetrickwasthattheydonatedtoeachother’spetprojects,providingasteady lifelineoffinancialsupporttokeepculturalinstitutionsalive
Atthesametime,DeFilippopointedout,
Therewasaprovincialsidetothedo-gooderimpression Localbanksstuntedcommercialdevelopmentinthecitybydenying loanstooutsideintereststhatwantedtolocateinBaltimore.Localmoneywasviewedasvitaltoestablishingaconnectiontothe community,butthelocalbanksweremoreinterestedinprotectingtheirfellowBaltimoreans(andclients)fromoutside competition
Baltimore’spopulationbecamemajorityBlackinthemid-1970s,andAfricanAmericansvotersbecamethedominantpoliticalforceinthe 1980s,culminatingwiththeelectionofKurtSchmoke,aRhodesScholarandHarvardLawSchoolgraduate,asmayorin1987.
Bythen,however,theeconomicfoundationessentialtotheformationofacivicestablishment locallyownedbanks,departmentstores, manufacturers hadbeendecimated ForBlackentrepreneursambitioustobecomeinfluentialinpublicpolicyasengagedcorporate leaders,theopportunitieshadbecomefewandfarbetween.
Thecity’sfivemajorbanks,whichhadprovidedthecoreofthecity’spowerbrokers,hadbeen,orwereintheprocessofbeing,takenover bynationalandforeignfinancialinstitutions.OneofBaltimore’spremierlawfirmshadbeenmergedintoanationalconglomeratewhile theotherhaditselfbecomeanationalfirmwithweakenedlocaltiesasmoreofthefirm’slawyerswereinNewYorkthaninBaltimore.
Whilethefocusofthiscolumnisontheeviscerationofcivicelites,DouglasMassey,asociologistatPrinceton,raisesamoreencompassing issueinthedeclineofmanycities.
https://www.nytimes.com/2023/09/13/opinion/cities-elites-baltimore-pittsburgh.html
9/13/23, 3:27 PM Opinion | A Hidden Reason Cities Fall Apart - The New York Times
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Masseywrotemetosaythattheprecariousstatusofmanycitiestodayhasrootsintheearlyandmiddledecadesofthe20thcentury whenwhitepopulationsandgovernmentbureaucraciesputuproadblockstotheabsorptionofthelargenumberofAfricanAmerican migrantswhoheadednorthasagricultureintheSouthbecamemechanized,andasfarmlaborerswererecruitedbynewindustriesin citieslikeBaltimore,Cleveland,St.Louis,DetroitandChicago.
Masseymadethecasebyemailthat:
BeingexcludedfromFederalHousingAdministration,VeteransAdministrationandprivatelendingprogramsbyinstitutionalized discrimination,AfricanAmericanswerebarredfromfollowingwhitestothesuburbswhilesimultaneouslybeingpreventedfrom purchasingandowningtheirownhomesintheghetto,puttingtheminastructuralpositiontobeexploitedeitherbyabsentee Whitelandlordswhosepropertiesweredeclininginvalueandinneedofrepair,incentivizingthemtomaximizerentsand minimizeinvestments,orbyunscrupulousrealestateagentsmarketingloaninstallmentcontractsthatcollectedhighmonthly paymentsfromaspiringBlackhomeownerswithlittlecapitalwhohadnoclaimtotitleuntilthelastpaymentunderthecontract wasmadebutwereresponsibleforupkeepandrepairsuntilthatdate.
Insum,whiteflighttoexpandingsuburbsanddeclineanddisinvestmentwithinBlackneighborhoodsincentralcitiesinthe1950s, 1960s,and1970swerebuiltintothepoliticaleconomyofmetropolitanAmericabypublicpoliciesenactedandprivatepractices institutionalizedduringthe1920s,1930s,and1940s.Attemptstoaddressthisstructurallydeterminedoutcomewithurbanrenewal andpublichousingconstructiononlyamplifiedthenegativeexternalitiesbyconcentratingdisadvantagespatially,andhelpfrom theCivilRightsErawastoolittleandtoolate,leavingcentralcitiestothedeindustrialization,deunionization,andeconomic restructuringofthe1980s,wheneveryonebecameobsessedwiththeriseoftheso-calledurbanunderclass
Whilecivicestablishmentsplayedakeyroleinguidingcitieswhiletheywerestillgrowing,theirinfluenceinthesubsequentstrugglesto reviveurbaneconomieshasbeenunevenandoftendisastrous
BenArmstrong,executivedirectorofM.IT’sIndustrialPerformanceCenter,arguesina2021article,“IndustrialPolicyandLocal EconomicTransformation:EvidenceFromtheU.S.RustBelt,”thattheparochialismandinbreedingoflocalcorporateeliteshasoften proveddetrimentaltolocaleffortstorebuildeconomiestomeettheneedsofthe21stcentury.
ArmstrongstudiedthelargelysuccessfuleconomicrevivalinthePittsburghregionandcompareditwiththeparallelbutlesssuccessful efforttoinjectnewcorporateinnovationinCleveland.
ArmstrongarguesthatamajorfactorinPittsburgh’ssuccesswasthefactthatthecity’slegacyofold-linecorporationswaseffectively displacedbyexpertsatCarnegieMellonandtheUniversityofPittsburgh,whowerefreebothfromconflictsofinterestandfromtiesto decliningindustries
ThatwasnotthecaseinCleveland,accordingtoArmstrong,whereold-linecompanieshadamuchstrongervoiceintheplanningprocess andwereunwillingtoproposethekindofradicalinnovationthatchallengedincumbentbusinesses
“IndustrialpoliciesinPittsburgh,whichempoweredresearchuniversitiesaslocaleconomicleaders,”Armstrongwrites,“contributedto thetransformationofthelocaleconomy InCleveland,bycontrast,stateindustrialpoliciesinvestedinmakingincrementalimprovements, particularlyinlegacysectors”
ThePennsylvaniagovernment“madeapoliticalchoicetoempowerPittsburgh’suniversitiesaspartofstateindustrialpolicy,”Armstrong writes,notingthat“theuniversities’roleasanengineoflocaleconomicdevelopmentinPittsburghwastheculminationofastate industrialpolicyinthe1980sthatgavethemnewauthoritytocultivateeconomicdevelopmentstrategyandhelpedthemrealizethattheir institutionalprioritiescouldalignwiththestate’sprioritiesforindustrialpolicy”
UnlikePittsburgh,Armstrongwrites,“Clevelandreliedonpre-existingprivate-sectorleadershipthatinvestedindowntown redevelopmentandinthemetroarea’slegacyindustries”Theresult,hecontinues,wasthatinsteadofpursuinginnovativeeconomic proposals,thepoliciesadopted“reinforcedthestatusquo.”
“Betweenthe1940sand1980s,”Armstrongwroteinanemailelaboratingonhispaper,“manylargecitiesoperatedinaversionof‘regime politics,’wherethereisaconsistentsetofpowerfulactorsinacity(typicallybusinessandnonprofitleaders)whoshapewhogetselected andwhereresourcesaredistributed.
“ForcitieslikeCleveland,BaltimoreandSt.Louis(youcouldalsolooktoDetroit,Rochesterandelsewhere),losingtheircoreindustries meanttheeventualfragmentationoftheregime.Buttheproblemwasthattheregimeoftencrowdedoutneweconomicleadersand activitiesfromemerging”
https://www.nytimes.com/2023/09/13/opinion/cities-elites-baltimore-pittsburgh.html
9/13/23, 3:27 PM Opinion | A Hidden Reason Cities Fall Apart - The New York Times
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Inrecentyears,theseadversetrendshavebeencompoundedbygeographicpatternsofurbangrowthanddecline.
CullumClark,directoroftheBushInstitute-SouthernMethodistUniversityEconomicGrowthInitiative,describedthesedevelopmentsin anarticleinApril,“AmericaKeepsMovingtoHighOpportunityCities”Acloseexaminationof2021and2022censusdates,Clarkwrites, “showstwokeydemographictrendsremainintact:migrationfromlargecoastalandMidwestmetrostotheSunBeltandmovementfrom coreurbanareastosuburbs.”
Thetop10destinationsforabsolutepopulationgrowthoverthelastyear,Chillumpointedout,
areallSunBeltmetros FourareinTexas:Dallas-FortWorth(#1),Houston(#2),Austin(#6),andSanAntonio(#9) Threearein Florida:Orlando(#5),Tampa(#7),andJacksonville(#10) Third-rankedAtlanta,Georgia;fourth-rankedPhoenix,Arizona;and eighth-rankedCharlotte,NorthCarolina,roundoutthelist.
Atthesametime,Chillumcontinued,
The10metrosthatlostthemostpeopleoverthepastyearareallplaceswherepopulationstagnatedbetween2010and2020 Theseincludefiveonthecoasts:NewYorkCity,whichsawbyfarthelargestdecline;LosAngeles;SanFrancisco;SanJose;and Philadelphia.ThisgroupalsoincludesChicago,Detroit,Pittsburgh,St.LouisandNewOrleans.
Thesamegeographicpatterns,Chillumwrites,emergeinthecaseofsuburbangrowthanddecline,revealing“asharpdividebetween suburbancountiesinboomingSunBeltmetrosandthoseinslow-growingcoastalandMidwestmetros”:
Allofthetop25countiesover50,000peoplefornetdomesticin-migrationrateslastyeararesuburbanorsmall-metrocountiesin theSunBelt TenofthesearesuburbancountiesintheTexasTrianglemetrosofDallas-FortWorth,Houston,SanAntonio,and Austin.Roughlyhalfofthe25top-rankingdestinationcountiessawfasterin-migrationlastyearthantheyexperiencedbetween 2010and2020.
Conversely,Chillumnotes,“10ofthecountiesseeingthelargestnetout-migrationratesaresuburbancountiesintheNewYork, Washington,SanFrancisco,andNewOrleansmetros.Sevenarecorecountiesofslow-growingorshrinkingmetros.”
ThepopulationshiftsChillumdescribeshavebeenpowerfullyreinforcedbythechanginglocationofFortune500corporateheadquarters.
InaJune9Fortunearticle,“TheBigCityWinnersandLosersoftheFortune500:WhyHouston,AtlantaandDallasAre(Almost)Beating NewYorkandChicago,”ChloeBergerdescribestheshift:
NewYorkCity,whichoncedominated,isstilltheking,butsitsonanever-smallerthrone.Thenortheastingeneralhasbeen dethroned,asNewYork,Chicago,Detroit,PittsburghandClevelandaccountedfornearlyhalfoftheFortune500in1957.Whileit’s truetheearliestformoftheindexonlytrackedindustrials,thelandscapeisvastlydifferenttoday,andthesouthis,well,hot
WhileNewYorkCityhad44headquartersin2023,downfrom136in1957,Texas,whenallthestate’scitiesarecombined,isnowhometo 55,“thegreatestnumberofFortune500companiesofanystateforthesecondyearinarow,”Bergerwrites.ThoseTexas-based corporations,sheadds,accountfor$26trillioninrevenueand$2265billioninprofit
https://www.nytimes.com/2023/09/13/opinion/cities-elites-baltimore-pittsburgh.html
9/13/23, 3:27 PM Opinion | A Hidden Reason Cities Fall Apart - The New York Times
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ClevelandPublicSquareintheearly1940s EwingGalloway/OfficeofWar Information/PhotoQuest,viaGettyImages
From1957to2023,accordingtoFortune,“Pittsburgh,with22headquarters66yearsago,Detroit(18)andCleveland(16)allfelloutofthe topfivein2023 Pittsburghranked7ththisyear,butthecity’snumberofFortune500companieshasshrunkbymorethan60percent,” from22to9
Whiletheglobalizationoftheeconomydrovetheabandonmentofmanufacturinginmanycities,theprocesswasacceleratedbythe adoptionofcertaingovernmentpoliciesinthelastthreedecadesofthe20thcentury.Thosepolicies,inturn,undercutcivicandcorporate localleaders,economicallyundermininglocalestablishments.
In2016,BrianS.Feldman,thenaresearcher-reporterwiththeOpenMarketsprogramatNewAmerica,wroteabitingcritiqueoftherole bothDemocratsandRepublicansplayedinthedeclineofSt.Louisandsimilarcities,“TheRealReasonMiddleAmericaShouldBe Angry”:
“In1978,JimmyCartersignedtheAirlineDeregulationAct,whichsweptawaytheCivilAeronauticsBoardandpavedthewayformassive industryrestructuring,”Feldmanwrote Thirteenyearslater,St Louisfelttherepercussionswhen“AmericanpurchasedTWA” withSt Louisitsdomestichub “in2001andlatermovedmuchofitsoperationstoChicagoO’Hare”
By2014,Feldmanwrites,“onlyfivehundredaircrafttookoffandlandeddailyatSt LouisInternationalAirportLambertField,afractionof theall-timehighof1,400in1997 Moreover,theairportservicedonly1,176internationalflights,downfrom3,826in2002”
Meanwhile,Feldmancontinues,
UndertheReaganadministration,thefederalgovernmentfundamentallychangedcourseonantitrustenforcement.TheReagan JusticeDepartmentwrotenewguidelinesthatrejectedregionalequityorlocalcontrolasconsiderationsindecidingwhetherto blockmergersorprosecutemonopolies Enforcerswereinstructedtowavethroughmergersandtolerateconsolidation,aslongas therewasnoactivecollusionandconsumersdidn’timmediatelysufferhigherprices.
Inthewakeofthoseantitrustpolicyshifts,“Between1980and1985,sixty-twoFortune500companiesweresubjecttocorporatetakeovers, andthesinglegreatestincreaseincorporateacquisitionsinUS historytookplacebetween1984and1985”
Alongsimilarlines,accordingtoFeldman’snarrative,in1994PresidentBillClintonsignedintolawtheRiegle-NealInterstateBankingand BranchingEfficiencyAct.Theresult?From1984to2011,“thenumberofindependentbankshasfallenbymorethanhalf,from15,663to 6,799.”
Feldmanconcludes:
TherelativedeclineofSt.Louis alongwiththatofothersimilarlyendowedheartlandcities isthereforenotsimply,oreven primarily,astoryofdeindustrialization.Thelargerexplanationinvolveshowpresidentsandlawmakersinbothparties, influencedbyahandfulofeconomistsandlegalscholars,quietlyalteredfederalcompetitionpolicies,antitrustlaws,and enforcementmeasuresoveraperiodofthirtyyears Thesechanges,whichenabledthesamekindofpredatorycorporate behaviorthattooktheRamsawayfromSt Louis,alsorobbedthemetroareaofavibranteconomy,andofhundredsoflocally basedcompanies.
Feldmaninalllikelihoodplacestoomuchemphasisonpoliticaldecisionsandtoolittleonoverwhelmingeconomicdevelopments,but whateverthebalancebetweenthetwo,thegenieisoutofthebottle.
Forthosewhowouldattempttorevivetheestablishmentofold,perhapsthebestadvicecomesfromVilfredoPareto,theItalianeconomist andsociologistwhodied100yearsagoandwhosuccinctlydescribedthedeclineandfallofelites:
“Historyisagraveyardofaristocracies”
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ThomasB.EdsallhasbeenacontributortotheTimesOpinionsectionsince2011.HiscolumnonstrategicanddemographictrendsinAmericanpoliticsappearsevery Wednesday.HepreviouslycoveredpoliticsforTheWashingtonPost. @edsall
https://www.nytimes.com/2023/09/13/opinion/cities-elites-baltimore-pittsburgh.html
9/13/23, 3:27 PM Opinion | A Hidden Reason Cities Fall Apart - The New York Times
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