THE AVENUE MAY 26, 2010
Did anyone notice that NEC director Larry Summers quietly exploded old-fashioned urban policy last week?
He didn’t mean to. In a speech at the Brookings-White House Council on Automotive Communities summit on May 18, Summers set out to talk about the economy, and how to stimulate manufacturing in general and auto manufacturing in particular. He identified four policy areas that are particularly important: the availability of credit; exports; innovation and R&D; and human capital. More credit, more exports, more innovation, and more educated workers could, in conjunction with huge and sustained local efforts, spur “remarkable renewal for the manufacturing industry that is the heart of America and the heartland in which it resides.”
In other words, what America’s most-challenged metropolitan areas – Detroit, Cleveland, Youngstown, Buffalo and their southern peers like Birmingham, Memphis, and Virginia Beach -- need goes well beyond traditional urban policy, with its focus on inner city housing and small-scale interventions into particular neighborhoods. Revitalizing Detroit will require big macroeconomic shifts on things like trade policy, currency exchange rates, and billions more dollars for R&D in things like energy.
Summers made the macro-to-metro link explicit. And what this link implies is that these places truly cannot rely entirely on their own resources for their recovery – Dave Bing has many talents, but he can’t move anything in the Doha development round of trade talks.
This also moves the debate about what to do about our old industrial cities out of the realm of special pleading for these places. Boosting exports is of critical concern to Youngstown and Toledo, but also to metros all across the country and up and down the scale of economic health: San Jose, Portland Oregon, Baton Rouge, which are some of the metros with the biggest share of gross metropolitan product devoted to exports, and New York, Houston, and Chicago, which have some of the highest total dollar amounts of exports.
Recognizing the links between metropolitan prosperity and macroeconomic changes does not entail dismissing housing and neighborhood revitalization efforts. They are critically important, but they have to be radically rethought in the context of many industrial cities. In Detroit, with tens of thousands of vacant homes, “housing” policy means demolitions to preserve housing value, not the construction of more affordable units. And neighborhood policy can fix neighborhoods, in large part by linking them to the larger economy, but it can’t create that larger economy.
Nor does recognizing the key role of federal and international policies let metropolitan areas off the hook for the things that they can and must fix, like service delivery, corruption, inefficiency, crime, and an unwillingness to act as a metropolitan economic unit.
But thinking macro to metro shows how much else has to be done to turn metropolitan areas around. All politics might be local, but metropolitan policies turn out to be global.