Sunday, July 11, 2010

Cleveland's Plight is Familiar Story

I grew up in Detroit, Michigan and left that city when I was 13 years old. It was bad then. The common joke among "Michiganders" that "flew" South in search of jobs and opportunities is that we hoped that "the last person who leaves turns the lights out." That was back in the 1970s and the situation is even worse now. With unemployment at more than 20 percent, the actual population is now less than 1 million people. In fact, it is roughly half the size it was around 60 years ago. It no longer benefits from government programs designed for large cities and the situation is so bad that they are literally tearing down complete neighborhoods in order to reduce crime and make room for other "opportunities," whatever those end up being. In that city's current tax, regulatory, and labor environment, it is not likely to attract anything except more of the crime that has made it a wasteland.

Cleveland, Ohio is another city following a similar path as Detroit. Over the last year I have become friends with a gentleman named Mark Pogue who has been without a job for two years and is seriously looking at moving South in order to create opportunities for his family. He is like many from that once great city that have no choice, but to leave. If Cleveland, Detroit, and other one time great cities on the Midwest want to improve in the furture, they will have to figure out how to get people to stay there.

Cleveland has always been a blue collar, hard working, town. Although it has never been particularly glamorous, it had been very successful as it employed and took care of families that came there for opportunities for generations. Now it is a city on life support and Nick Gillespie of Reason.comsuggests that saving that town entails keeping the population.

When a chamber of commerce discusses a town's success on websites and brochures, one of the things they use to measure a city's success is its population growth. Gillespie points out that the numbers are not very good for Cleveland. It has experienced a decline that is very similar to Detroit, as the town has gone from almost 1 million residents in the 1950s to less than half of that today.

Yet, Cleveland is not without hope. It was not that long ago that it was a town enjoying renewal. The downtown area enjoyed enormous redevelopment (largely government driven and, therefore, expensive on taxpayers) and was becoming a cultural hot spot with a new sports stadium and the creation of the Rock and Roll Hall of Fame. But let's face it, jobs, not culture, keep cities rich in people. As a result, much of the older venues in the city are ugly reminders of how great it use to be and newer buildings are becoming monuments to the false promises of politicians who told the people that Cleveland was poised for a comeback. Millions of dollars from taxpayers were extracted from activities that make economies grow to things that get politicians reelected and fixed for life. Gillespie calls them "sweetheart deals" that demonstrate disdain towards the real needs of the public.

So how do you revive a city like Cleveland? Gillespie suggests that, since the problems of the city exists on several fronts, so should the solutions. Cleveland needs to lower the cost of government services, anything that can be done by private companies through competitive bidding should happen immediately. When you think of the high cost of government employees versus private ones, this would immediately drive costs down. This competitive attitude should be seen in the way young people are educated. The city should explore charter schools and other "choice" options on a large scale to attract people who will want their children in Cleveland's schools. Cleveland should aggressively lower its tax rates as much as possible to be more competitive to other cities that might be interested in relocating and it should reform regulations to make the city more friendly to entrepreneurs. Saving Cleveland will happen from the ground up, not the government down. Policymakers need to operate from that simple premise.


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