Localism Can Only Flourish With A Competent, Generous, and Fair Federal Government

By Joe Cortright, Economist and Director of City Observatory

This column was originally published by City Observatory.

Joe Cortright cropped.jpg

In the past year, a growing chorus of voices, disillusioned by growing polarization, has called for cities to be our saviors.

There’s an understandable impulse in the face of growing national divisions and what for many was the shocking and unpleasant outcome of the 2016 national elections to retreat to a comforting cocoon of the like-minded. Blue cities will do what a Republican national government won’t do: respect LGBTQ rights, provide sanctuary for immigrants, denounce climate change, and tax themselves to pay for needed investments and public services. Butwithdrawing to the safety of agreeable blue localities cedes the important national battle when it needs to be contested most.

It is well and good to celebrate the successes that mayors and local leaders are having. But transforming these successes into a sweeping call for a new localism is misplaced when the fundamental functions of the national government are being steadily undermined. Localism doesn’t work in a world where the federal government is not simply rending holes in the safety net but knocking down its foundations.

What cities do badly or can’t do at all

Cities are ill-equipped to tackle major challenges on their own, and localism has a history of making many problems worse. Take two big issues of our time: climate change and surging inequality. Mayors and cities can demonstrate effective tactics, but they lack the policy throw-weight to solve these problems.

Bravo for mayoral pledges to adhere to the Paris accords, but there’s little substance and sufficient scale. New York Mayor Bill de Blasio can sue the oil companies, but is an ardent opponent of congestion pricing, a tangible, effective market-oriented step that would reduce the top source of greenhouse gases. It’s hard to imagine that we’ll take effective action against climate change unless it’s done at a national level in cooperation with the rest of the world. Without a federally imposed carbon tax or cap and trade, localized efforts are likely to relocate the dirtiest pollution to the most permissive states.

Similarly, inequality—which has been dramatically worsened by changes to the federal tax code—dwarfs anything cities can do. Cities are constitutionally incapable of redistributing income because the wealthy have the option of exit (which they have regularly done). Witness the exodus to suburban enclaves, a trend Robert Reich has termed the secession of the successful. Similarly, states and cities have been largely powerless to take on large corporations. Globalization moved a considerable part of corporate earnings beyond the reach of state and local tax collectors (note Apple’s relocation of its profits to Ireland thanks to U.S. tax laws), and states and cities are falling over one another to offer Amazon tax holidays and subsidies for HQ2.

Cities have also been implicated in the nation’s housing affordability and segregation problems. Local control of zoning and land use, which has been effectively exempt from federal control, has worsened the economic segregation of our nation’s metropolitan areas. In sprawling metros, separate suburban cities have leveraged land use regulation to exclude apartments, deepening the concentrated poverty that perpetuates the worst aspects of income inequality.

The root of the problem is too much localism. The most localized governments have the strongest incentives to exclude low-income groups and minorities. Suburbs within metropolitan areas do the same. Only larger units of government have the incentives and ability to challenge this kind of parochialism. Two initiatives of the Obama administration—HUD’s affirmatively furthering fair housing rule and the Council of Economic Adviser’s critique of local zoning—were important national steps pushing local governments to confront this issue. Both are going nowhere under the current administration.

We can’t take the federal government for granted

The danger is that calls to renewed localism aid and abet ongoing efforts to systematically dismantle federal programs. The clarion call to act locally diverts our political attention from the national stage and perhaps, unwittingly, becomes an excuse to stand by and watch foundational programs be destroyed.

Localism will work brilliantly—provided we have a competent, generous, fair, and functional federal government. We need a 21st century federalism that envisions strong and mutually supporting actions at both national and local levels.

For a long time, we could more or less take for granted that the federal government would, at least, keep doing what it had always done: cashing social security checks, bankrolling medical care for the poor and aged, enforcing minimum civil rights everywhere, engaging seriously with the rest of the world on global issues. Now, each of those fundamental roles is in jeopardy. If the poor lose health care, are turned out of subsidized housing, see their education prospects dim, it will add to the costs burdening states and cities. The pressure to fill in for a diminished federal presence will handicap local innovation.

Like localism? Time to fight for an effective national government

If you care about cities and believe local initiative can lead to solutions, you need to be marching on Washington and fighting for a federal government that does its job well. The hollowing out of the federal government now underway is the clearest threat to creative, effective localism. Ultimately, the magic of our federal system is that both national and local government have important and complementary roles to play. It’s not either/or. It is both/and. Innovative cities require a supportive federal government.


Joe Cortright is a Portland based economist and Director of City Observatory, a virtual think tank on urban policy (www.cityobservatory.org). Cortright has served as an adviser for state and city economic development efforts around the nation, and has been a non-resident Senior Fellow at the Brookings Institution.


Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

We invite readers to contribute to the civic conversation about community development in St. Louis by writing an op-ed for the Community Builders Exchange. Op-eds should be short (400-700 words) and provocative. If you have an idea for an op-ed, contact Todd Swanstrom at swanstromt@umsl.edu.