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Liberalism’s Mean Streets

By Dan Coats and Spencer Abraham

How conservatives can reverse urban decline

American liberalism has always been centered in our cities. That is where government subsidies have traditionally been most generous and government regulations most onerous. If there were any basis for liberals’ faith in the power of big, bureaucratic programs to improve people’s lives, we should see it in the form of prosperous, socially vibrant inner cities.

Unfortunately for urban Americans, no such evidence exists. The liberal love affair with Big Government policies has cost urban areas a great deal. Our cities, for so long the center of public life, have suffered economic stagnation and social breakdown. These severe problems have followed—indeed, we would argue, directly resulted from—ill-conceived government policies that have discouraged small business, punished families, and hampered local associations’ efforts to maintain safe and nurturing environments.

Indications of liberalism’s failure are all around us. But perhaps most damning is the massive flight of citizens from our urban areas. Since the mid-1960s, America’s largest 25 cities have collectively lost about 4 million residents. St. Louis, for example, experienced a 32 percent drop in population between 1972 and 1992. Detroit lost 50 percent during the same period, and other cities like Boston, Baltimore, and Cleveland have seen significant declines.

Those who remain have been increasingly surrounded by violence and poverty, with few of the social and community resources Americans once took for granted. The rate of child poverty in central cities, 33 percent, is more than twice that of suburban areas. More than a third of inner-city children in families are being raised by mothers alone. Violent crime increased 500 percent between 1960 and 1990. And all this came about while we were spending $5 trillion for a "War on Poverty."

Faced with this massive suffering, conservatives cannot and must not turn away. Harsh experience has proven that Big Government programs destroy the social capital on which healthy families and communities rely. We must help free communities from rules and regulations as they seek to rebuild. Conservatives should welcome this chance to show that community and opportunity can solve the problems caused by Big Government. As we seek to build a governing coalition and a healthier society, we must put our beliefs to work helping liberalism’s urban victims.

We also must keep in mind that so-called urban problems are no longer exclusive to big cities. From illegitimacy and poverty to crime and drug abuse, small cities and rural areas are feeling the effects of decades of Big Government liberalism.

Crime in particular has been described as a big-city problem, but statistics tell a more complex story. From 1994 to 1995, the eight American cities with at least a million residents saw a 6.4 percent drop in total crime. Crime rates in these cities have dropped for 6 consecutive years. Homicide rates dropped 11 percent in 1997 alone. But crime in a number of smaller cities is on the rise. Louisville, Kentucky’s 68 homicides last year, for example, were a 17-year high. Fort Wayne, Indiana, had 37 killings in 1997 compared with 13 in 1996, while Nashville had a record 112 murders. Rural areas experienced a 6 percent surge in robberies and a 4 percent increase in auto thefts last year. Jack Levin, the director of Northeastern University’s Program for the Study of Violence, blames complacency: "Small towns thought they were immune from teenage violence and didn’t prepare for the onslaught."

In many areas the onslaught is just beginning. James Alan Fox, also of Northeastern, notes that "adult crime is way down. . . . Meanwhile, the population of teenagers is beginning to rise." Fox notes that these teenagers "have too much television and not enough supervision." The breakdown of families has been central to the rise of crime, and in many areas the situation is getting worse.

For decades, liberal social programs that provide assistance only to families without fathers have encouraged families to break up or discouraged them from forming at all. Ironically, these programs were justified in part by the liberal claim that they would eliminate the "root causes" of crime—economic disadvantage. But crime rates shot through the roof during the War on Poverty. Worse, liberal programs have coincided with the explosion of a critical cause of crime and most other forms of social dysfunction our cities face: family breakdown.

After rising for decades, overall illegitimacy rates appear to have stabilized—but at dangerously high levels. About 32 percent of all American births take place out of wedlock, up from 8 percent in 1965. And broken families are at the heart of our social problems. William Stanczykiewicz, the policy director for community development under Indianapolis mayor Stephen Goldsmith, notes, "Out-of-wedlock births drive all other social challenges we have. Illegitimacy rates here reach 41 percent, and that is too high. Despite the courageous efforts of many single parents, we know that their children are far more likely to do poorly in school, to abuse drugs, and to commit crimes."

Barbara Dafoe Whitehead observed in 1993 that the relationship between single-parent families and crime "is so strong that controlling for family configuration erases the relationship between race and crime and between low income and crime." Whitehead also observed that illegitimacy significantly increased the likelihood of welfare dependency, poor educational performance, drug use, and even suicide.

The social fabric holding together even our healthier communities is beginning to tear. If we are to save them, conservatives must offer an alternative to Big Government. It is up to us to show that communities, working together, can achieve what liberal programs have failed to do: help people in need without breaking down the civic associations and incentives necessary to encourage people to get an education, delay childbearing until marriage, work hard, and build decent lives.

In recent years, we have seen Big Government repackaged to look community-friendly. President Clinton came into office promising to implement a market-based empowerment agenda for troubled communities. In their 1992 campaign book Putting People First, Bill Clinton and Al Gore wrote, "We believe in free enterprise and the power of market forces. We know economic growth will be the best jobs program we’ll ever have." Unfortunately, more bureaucracy, not less, has been the rule. To get the benefits of President Clinton’s "empowerment zones," local officials have to present comprehensive community-development proposals to an "Enterprise Board" in Washington. No wonder Jack Kemp called the Clinton zones "a throwback to the top-down, paternalistic policies which have dominated liberals’ thinking on poverty since the Great Society."

Atlanta’s community-development officials note that Clinton’s enterprise communities typically undergo a 24-month "planning" period. The product of these lengthy and expensive bureaucratic efforts has been more bureaucracy. From a renewed industrial development board in Los Angeles to several new "partnerships" overseeing government loans, local bureaucracies have been the main beneficiaries of the Clinton zones.

Meanwhile, troubled communities receive precious little actual assistance in their efforts to rebuild. The nine Clinton empowerment zones created so far qualify for minor tax breaks, including an employment tax credit and an increase in business expensing. Hundreds of other communities qualify for a share of $280 million in annual social-services block grants.

These zones are anemic. The wage credits benefit only existing businesses, and there are no significant tax incentives to spur the creation of entrepreneurial businesses and investment in distressed communities. Worse, the block grants, used to fund many local bureaucracies, perpetuate the failed notion that government can create jobs and prosperity in America’s inner cities. The zones promote government, not private enterprise. Nor do Clinton zones bring significant relief from local taxes and regulations on entrepreneurial activity. Clinton zones lack the essential elements necessary to revitalize troubled communities: freedom and flexibility, incentives to invest, and more room for local associations to play a major role in reforming people’s lives.

Since they were first proposed by Jack Kemp in 1980, enterprise zones have been intended to help communities with unusually high levels of poverty and unemployment. These areas suffer from mutually reinforcing economic and social problems. Yes, we must address social problems made worse by anti-family welfare programs of the past, but we must also address the lack of economic opportunities in distressed areas. Empowerment zones must be "supercharged." If they are to attract businesses and the jobs that come with them, cities must be allowed to offer substantial tax incentives.

Perhaps the biggest step is the elimination of capital gains taxes for distressed areas. For decades now, states and localities have competed to attract new and expanding businesses and the jobs they generate. Right now, struggling urban areas do not have much bargaining power in this competition. By eliminating capital gains taxes in empowerment zones, the federal government could substantially reduce the tax burden endured by job creators in these areas.

Jersey City mayor Brett Schundler says, "It is time for the federal government to put in place incentives that will help us rebuild. By zeroing out capital gains taxes, the federal government can help us compete for jobs and business and thereby revitalize our city."

Another key element missing from existing zones is school choice. Despite polls showing that inner-city poor people are demanding greater control over their children’s education, the Clinton administration has ignored this crucial aspect of any plan to revitalize our cities. This denies poor urban families control over their children’s education and consigns them to substandard schooling. As a result, a number of liberal Democrats, including minister and former congressman Floyd Flake of New York and Senator Joseph Lieberman of Connecticut have endorsed school choice as a means of empowerment for urbanites.

With some exceptions, inner-city public schools are generally failures. Education Week recently reported that only 40 percent of fourth- and eighth-graders in urban schools had scored at a basic level in reading, math, and science tests. Liberal tax-and-spend policies have not worked. In Washington, D.C., the prototype for big-city largesse, the government spends $7,300 per pupil in public schools. This is more than twice the $3,100 per pupil spent by the average private school. The results? Washington suffers from a secondary-school dropout rate of 40 percent and test scores that are among the lowest in the nation.

Not surprisingly, then, in cities like Detroit, choice scholarship supporters outnumber opponents three to one. Detroit’s Council of Baptist Pastors argues that school choice "is a civil right, as basic as democracy, because it lets families vote with their feet on the best school for their child. . . . It is an injustice that our present system denies our children an equal opportunity for a quality education."

Empowerment programs cannot work without school choice. Maryland’s Calvert Institute commissioned a poll examining the effects of education on population flight from the city of Baltimore. Despite its empowerment zone, Baltimore loses 1,000 people a month, net. Worse, says the report, "Most of the leavers were just the sort of young, middle-class people the city must retain." Why are they leaving? Among parents of school-age children, 31 percent cited the schools as their main reason for leaving. Fifty percent named education among their top three reasons.

The poll also found that 51 percent of leavers with school-age children might have considered staying in Baltimore had there been school choice and vouchers. Among African Americans in this group, the figure was 70 percent. If cities want to stop the flight of their working and middle classes, they must adopt school-choice programs. Under such a program, according to the Calvert Institute, "up to 4,600 families might be induced to stay in Baltimore annually."

One place where school choice has played a role in local urban politics has been Milwaukee. There Democratic mayor John Norquist is working to expand the city’s highly successful school-choice program. According to David Riemer, the city’s director of administration, "The single biggest reason middle- and working-class people leave Milwaukee and many other cities is education. Thousands of families every year leave because they do not want to risk having their child end up with a bad teacher or in a bad school. The competitive pressure school choice puts on schools to improve is the single best way to bring people back into the cities."

School choice also empowers parents. As the Detroit Pastors reported on their examination of school choice programs in Milwaukee and Cleveland, "At school after school, we saw a new kind of educational environment emerging because of choice. Parents were welcomed into the classroom and given active roles of influence and respect in the school. And district schools were working harder to keep parents, multiplying popular programs."

Parental involvement is critical to educational success. Thus it is no surprise that school-choice programs have improved test scores by involving parents. A recent University of Houston/Harvard report shows that students participating in the Milwaukee choice experiment made major academic improvements compared with a public-school control group. Students in their fourth year of the choice program increased their reading scores by 5 percentage points and their math scores by 12 percentage points.

Parental involvement also incorporates parents into the community. School choice must be an integral part of any empowerment strategy because it is necessary to bring parents and local leaders together. Where the Clinton program has allowed Big Government to micromanage local communities, successful reform must create more opportunity and incentive for local communities to rebuild themselves.

Empowering people in our cities will require real, community-based empowerment zones that provide real tax incentives and real reforms aimed at empowering parents and community leaders.

Over the last 18 months, 30 members of the House and Senate have developed a comprehensive empowerment plan. We call it "Real Life"—"Renewal, Empowerment, Achievement and Learning for Life." We believe it embodies the elements essential for helping low-income families and communities reach self-sufficiency. It includes three components: economic empowerment, community renewal, and educational opportunity, each of which we outline below.

Economic empowerment. We want to nurture the economic renaissance of our cities. One of the great underreported stories of our booming economy is the role of tight labor markets in forcing businesses to look to inner cities for workers. For example, worker shortages in Wisconsin last year prompted Allen-Edmonds Shoes to move a major facility to inner-city Milwaukee. Allen-Edmonds turned to local churches to find qualified employees, underlining the relationship between social and economic capital. Elsewhere, cities like Indianapolis are aggressively seeking to bring businesses into poor neighborhoods by reducing regulation and expediting licensing applications.

To encourage this trend, we would designate America’s 100 poorest neighborhoods (a significant majority of them urban) as "renewal communities" and target them for pro-growth tax and regulatory relief. Our plan would eliminate the capital gains tax for investments in these areas, increase tax write-offs for plant and equipment purchases, and give businesses a 20 percent wage credit for hiring qualified, low-income workers. In exchange, states and localities would have to reduce taxes and fees within the renewal community and waive local and state occupational licensing regulations.

Community renewal. We must strengthen the churches and volunteer groups that bind communities together and heal individual lives. Building on the 1996 welfare reform, we would encourage states to transfer more authority and resources to nonprofit groups through a charity tax credit. States would give their citizens the choice of contributing a significant portion of their tax liability to private efforts working in their communities.

Many Americans already are doing the work necessary to rebuild our communities. Beginning in urban areas, their efforts can guide us in restoring hope and opportunity to both cities and suburbs. The most interesting results in this area are arising when public reform efforts are matched to private support. In Ottawa County, Michigan, Governor John Engler‘s "Project Zero" has aimed new rules and resources at an area of mixed urban and suburban sites. The goal: reduce to zero the number of welfare recipients without any earned income. Ottawa County achieved this goal last September, in part by providing publicly funded transportation, mentoring, and day-care services to help welfare recipients get and keep jobs. But this is not just a handout. Those who refuse to comply with work requirements have their welfare checks cut by 25 percent, and face the prospect of losing aid altogether if they do not find work in three months.

These public reforms have been joined to the efforts of Ottawa County’s local churches. Federal welfare reform has freed the community and its churches to help literally hundreds of residents of Ottawa County off welfare, with the aid of neighbors providing advice, rides to work, and emotional support. This community knows that neighbors can do far more to help people in need than a simple check from the government.

The close-knit relationships fostered in such communities are helping welfare recipients find their way to stable jobs, stable homes, and the stable habits needed to keep them. Welfare reform legislation should help reverse welfare dependency and the breakdown of community. But the bulk of the work must be done by communities themselves, and by churches, private entrepreneurs, and citizens.

Education. Our legislation calls for a large-scale test of publicly funded scholarships for poor children. These scholarships would provide immediate relief for families and bring badly needed competition into the public-school system.

Educational reforms will not only improve the performance of urban students, they will improve the performance of urban communities. For too long, poor urban residents have been trapped in an uncaring, unresponsive system that regards them as unqualified to judge what is best for their own children. Milwaukee and Cleveland show that school choice can free parents from this trap, allowing them to retake control over their children’s education and broader areas of their community lives. No wonder 63 percent of parents in Cleveland were "very satisfied" with the academic quality of their chosen schools, compared with less than 30 percent of public-school parents.

Schools were once critical parts of our communities. They must again become so. And that requires that we empower people to play a full role in their children’s education. Parents meeting together to improve their children’s education will naturally go on to discuss other topics of public importance, from crime to drug use to local economic conditions. Combined with a renewal of small businesses that provide convenient meeting places for neighbors, these contacts can help rebuild the nexus of social institutions that once protected children and families from crime, abuse, and neglect. By revitalizing schools, voluntary associations, and the economy, we can help people in our distressed urban areas to rebuild their communities.