Bloomberg: The Neo-Liberal Economic Developer?

I’ve been reading stuff lately about the goings on in New York City. The new De Blasio administration is proclaimed by many to be the wave of the future? For me it’s too early to tell. Only fair to give the poor soul at least a full year before we see what his new approach shakes down to be. Instead, this article prefers to look in the rear view mirror and critique his predecessor, Mayor Michael Bloomberg (1), to understand better his economic development strategy during his three terms in office; and (2), to grapple with the “luxury city/two cities” dialogues which seemingly carried De Blasio into office.

Are luxury city/two cities  mere rhetorical, ideological, media-friendly metaphors used to attack a political opponent? Are the terms little more than a symbolic label used by political ideologues whose purpose are more to divide than understand? Or do these concepts constitute a real economic development strategy or an approach to governance that centered around economic development?

First things first: what hath Bloomberg wrought?

The Bloomberg Economic Development Strategy:  A Summary

Upon assuming office (January, 2002), Bloomberg immediately had to confront: (1) a $6.2 billion budget deficit arising from depressed revenues caused by 9/11 and the World Trade Center catastrophe; (2) a burst technology bubble, a  2001 stock market collapse and 2002 recession which depressed stock industry bonuses from which twenty-five percent of New York’s revenues originate. Also relevant to the luxury city strategy discussion is that as the strategy was being implemented, we waltzed through a (3) 2008-2009 Great Recession and Collapse of American Finance Industry (did we mention earlier that New York City was the “financial capital of the world”), which again crushed bonuses and depressed real estate values (and taxes) , and, for a coup de grace, caused huge financial sector down-sizing-bankruptcy-consolidation (this is no way to treat a core cluster of one’s economic base).  Mother Nature, not wanting to appear impotent in comparison, arrived on the 2012 scene in the form of (4) Hurricane Sandy. Governor Cuomo totaled the impact of Sandy on New York at $32 billion and, an indisputable authority of all things New York, the Huffington Post, said it was $42 billion.

We mention these events only as context; the reader can make her own judgment as to how well Bloomberg responded to it all–but all this did hit the fan while the so-called luxury city strategy was being implemented.

Bloomberg: aka Neoliberal

Bloomberg: aka Neoliberal

What hath Bloomberg done in terms of comprehensive economic development strategy while he was in office? Based on his 2002 “Five Borough Economic Development Strategy”, that strategy articulated three goals and eventually included some sixty plus specific initiatives. This review will use these three goals as a classification system to categorize the major economic development-related initiatives pursued throughout his three terms. In the below paragraphs we will specify the goal and its specific objectives (in bold)  and then list his actions and initiatives which, the Curmudgeon at least, believes to be related. We shall not make any comment regarding the perception or reality of how well any of these programs/initiatives worked. They all were at one time or another severely criticized–and almost certainly the performance of each initiative is a  mixed bag. At this point this classification system is only meant to be a reasonable description of his goals/objectives and programs launched during his Administration.

Sub-Strategy A: Make NYC More Livable: (a) access to affordable and adequate housing for all income levels; (b) revitalize waterfront (all five boroughs) to create dramatic, high income housing and accessible parks; (c) construct strategic parks and open spaces to stimulate surrounding area development; (d) pursue other livability issues to make NYC attractive to live and work

  • Bloomberg  in 2002 gained full control over the school system (which is a Mayoral Department in NYC)  and a new superintendent, Joel Klein, reorganized the City Department of Education emphasizing efficiency and accountability. The Mayor established Leadership Academy (privately funded) to train principals; incorporated many new charter schools and expanded the number of middle and high schools to reduce number of students at each school; eliminated social promotion in first and fifth grades; increased teacher wages significantly and performance standards were increased. An Achievement Reporting and Innovation System provided info on each school to the public (student performance, and student progress). In 2007 the city won Broad Prize for Urban Education based on rising student achievement and narrowing minority achievement gap.
  • Launched a Housing Initiative to provide $3 billion for construction and renovation of 68,000 units of low income housing, especially in waterfront areas and also provided funds for improving open spaces adjacent to new housing.
  • In 2007 the City allocated $1 billion to extend a subway line (7 line) in Manhattan
  • Budget and spending cuts to reduce projected budget deficits, reduce services, increase borrowing, and in later years increase property taxes, fines and fees. Fiscal stability was accomplished in large measure through tax increases and budget cuts–and some borrowing.
  • Construction of Third Water Tunnel
  • Two new baseball stadiums and plans for a basketball arena, the Hudson Yards, and the Atlantic Yard Project. All of these by, we suspect, anyone’s standards are mega projects and the Hudson Yard’s in particular was also exceedingly controversial.
  • Established a 311 telephone system  (non-emergency help line)
  • Initiated a Stop and Frisk Program in high crime neighborhoods
  • In 2007 the City introduced a plan to introduce road pricing for Manhattan’s CBD (below 60th) to limit congestion and acquire revenues–rejected by the NY state legislature
The High Line--20th Street

The High Line–20th Street

Sub-Strategy B: Make NYC More Business-Friendly so firms are more competitive (profitable) and create more jobs: (a) develop borough central business districts (create supply); (b) attract and retain firms through carefully targeted incentives and aggressive outreach; (c) adopt customer service orientation to support small business by treating them as partners; (d) develop city workforce by increasing talent base and placing in jobs; (e) improve transportation and other infrastructure to catalyze growth

  • Planning and Rezoning were key initiatives to both sub-strategy a and b. A city-wide rezoning initiative (1) converted former manufacturing districts into mixed use office/residential, (2) expanding development opportunities in borough CBDs through up-zoning (allowed higher densities than commercial would warrant), and provided for more real estate and transportation infrastructure investment opportunities augmented by potential tax incentives for relocating to a CBD, (3) permitted “balanced rezoning” in residential districts which were under attack from commercial development, (4) allowed neighborhoods outside Manhattan to limit commercial development through downzoning.
  • In 2001 the City had only one One Stop. Bloomberg revamped the City’s workforce programs (WIA) and he put adult training in the Department of Small Business Services and youth training under Department of Youth and Community Development. SBS opened Workforce Career Centers to assist job seekers and Business Solution Centers to provide business services to grow their companies. Centers were opened in each borough. In 2004 SBS created “industry desks” to build relationships with business in specific clusters (as part of its cluster initiative);
  • Created New York City Marketing Development Corporation to mobilize private sector resources and to market city assets (rights to sell advertising in city buildings. Spanish construction firm Cemusa paid $1 billion for rights to advertise and also agreed to maintain 3300 new bus shelters, 330 new newsstands, and 20 public toilets. The Marketing Development Corporation improved its control over city’s intellectual property, leasing, branding rights, selling images of Statute of Liberty–made agreements with History Channel to create a NYC Official History Center, and Snapple to market the city internationally in return for the right to distribute its products on city property.
  • Bike lanes, improved parks with improved “furniture” in Times Square, High Line
  • Attempted to win the 2012 Olympics (failed in 2005)–strong local opposition to venue development–very, very controversial.
  • Bloomberg himself met with a number of corporate leaders  “New York City is Open for Business”; the key to business development was to provide firms with “appropriate space and infrastructure, and individuals, especially highly trained specialists with good living conditions [Florida-like]–rather than focus on incentives. “Between 2001-2006 the number of corporate retention deals fell from 38 in Giuliani’s first term to 5. The NYSE (stock exchange) was NOT offered tax incentives but stayed in NYC anyway. His chief economic development guru at that time, Dr. Doctoroff  stated: “we came to the view early that there was little benefit, in fact potentially significant costs, to having an incentive-based economic development strategy. We want to focus on those companies that are in the city because they gain unique economic value from being here” cited in Michael E. Porter et. al. “New York City: Bloomberg’s Strategy for Economic Development”, p.10.
  • In 2005 Bloomberg created a Commission on Construction Opportunity (with unions, employers, and developers); subsequently unions increased by 40% number of slots for apprenticeship (for women, minorities, veterans and young high school grads)
  • Launched a career and technical education (CTE) school initiative in Department of Education and 110,000 students were taught each year in 282 CTE programs ran in 26 specially designated CTE schools. The city also funded a $45 million 1000 seat high school for Design, Engineering and Construction Trades.
A Depiction of the Hudson Yards Project

A Depiction of the Hudson Yards Project

Strategy C: Diversify Economic Base and reduce dependence on Manhattan-based financial services; (a) promote tourism by marketing and targeted infrastructure investments; (b) attract and retain firms through targeted incentives and aggressive outreach; (c) enhance competitive advantage of other industries likely to grow.

  • Embraced (after 2004) cluster strategy by partnering with New York State  with more than a dozen world-class research institutions, business leaders, and investors to strengthen the bio-science sectors. He opened the city’s first bio-science office park (East River Science Park, $700 million), with wet lab, in partnership with Alexandria Real Estate Equities opened in 2009 and landed first tenant, (Eli Lily) Imclone ($40 million tax breaks and $10 million fit out). Pfizer and other medical-related firms have since located on site. There are other examples of Bloomberg’s use of tax incentives to attract firms.
  • A key Bloomberg focus was providing improved access to real estate for industrial uses and to review/revamp the city’s industrial parks. Some parks were rezoned for office/residential uses and others were reclassified as Industrial Business Zones (IBZ) which were guaranteed not to be rezoned for residential use in the future. By 2008, 16 IBZ had been established in the boroughs outside Manhattan and the City established an Office of Industrial and Manufacturing Business.
  • In 2004 partnered with non-profit Initiative for a Competitive Inner city (founded by Michael Porter) to identify clusters that “leveraged Brooklyn’s diverse population and competitive advantages”.
  • With the NYC Department of Cultural Affairs inaugurated enhanced financing for non profits–with a budget of $250 million it had more resources that US Endowment of the Arts
  • The NYC Mayor’s Office for Film, Theater, and Broadcasting–it claims to be the first in the nation–coordinated city paid access to building interiors, police support and parking as well as other services to media and artists (unclear how much of Bloomberg is here versus other Mayors–goes back to the mid-1960’s).

[Hurricane Sandy led to a $20 billion “resiliency” plan justified confidence that NYC was no Atlantis, that the City could adapt to climate change, and would not disappear into the sea overnight. Since this more than touches on disaster recovery–although a legitimate element of economic development–is probably not an element of the luxury city/two cities motif–and is so recent that we do not include it in our analysis]

What Does the Curmudgeon Make of All This?

There are a lot of moving parts to Bloomberg’s economic development strategy. First, he defines economic development broadly. Economic development is never about just creating  jobs. Economic development creates, and distributes, prosperity and quality of life in its multiple forms to the various segments of its resident population.

Accordingly,  a broadly defined economic development allows Bloomberg to use other policy areas as part of his economic development strategy. Education and planning became central elements of Bloomberg’s economic development vision. Reform of the school system and the provision of affordable and luxury housing were key elements in Bloomberg’s strategy. The fact that Bloomberg raised taxes (negative business climate to be sure) to pay for new schools and enhanced teacher salaries demonstrates the almost inevitable trades-off among the different components of any jurisdiction’s economic development strategy.  But it also acknowledges that World Cities do not compete with incentives on the basis of low cost, low tax, less services. Bloomberg raised taxes/fees, especially in his first term. If nothing else, Bloomberg downplayed the traditional “business climate” strategy found in most American cities and states. His aggressive attraction and retention program was built less around incentives (although he used them when he thought he needed to) than his own ability to talk with and partner with the CEOs from whence he came. If he was a plutocrat, he used that status to talk to other plutocrats and induce them to some positive relationship with the city. If he was a media-darling, that access to the media served his marketing/attraction campaign well.

Bloomberg’s creative use of planning, re-zoning in particular (I am less keen on his furniture for parks and closing Times Square to traffic) of former industrial parks to mixed uses deemed suitable to the each Borough and its CBD is really, really good because . Also, the East River Technology Park has been quite successful in attracting big name firms and jobs–but frankly we suspect the personal contact and resources of the Mayor were instrumental to its success. Economic developers with less well-connected Mayors in smaller cities will almost certainly risk that a similar type venture will linger and stumble more. Good planning as an economic development tool is rare, in my opinion. Too often planning has been more anti-business than an inducement for business location and expansion.

New York City Hall

New York City Hall

The Curmudgeon, who has had experience with redevelopment and physical development projects, was quite impressed with the number of these initiatives. But their uneven success, and the intensity of debate, he suspects, are  indications of Bloomberg’s tin ear and tendency to overreach. Three stadiums with all sorts of high profile owners and players, the World Trade Center, water tunnels, and subway lines tends to scatter one out and surround policy implementation with endless crises and confrontation. So while I do favor physical development—please focus a bit. I suspect that Bloomberg’s many projects created a critical mass of opposition and that contributed in no small measure to the luxury city/two cities attack.

As to the workforce initiatives? Not bad. The attention he gave to workforce is probably more than past Mayors had paid. His workforce reorganization, on the face of it, seems reasonable and the decentralization to the Borough-level should have been done years previously. Again, having a well-connected Mayor allows for a much more meaningful private-public partnership opportunities–and we believe that is mostly good.

Bloomberg, and any New York City Mayor, is being between a rock and a hard place–especially considering that whoever is in charge, the New York City Mayor and the New York Governor are seldom anything but rivals and competitors. There’s seldom any shining knight on a white horse riding in from Albany.

Finally, the comprehensiveness and the sticktoitiveness? of plan implementation is, honestly, astounding. Bloomberg grabbed a hold of New York City, focused it for a decade, and kept it moving in one direction. You try it sometime. See how easy it is.  What truly amazes me was Bloomberg’s ability to roll with the punches–the City got some real body blows during his administration: the collapse of the finance industry (remember his tax base was the finance industry), Hurricane Sandy, and the Great Recession. Governing New York City is difficult enough without these stocking stuffers.

The Luxury City as World City

NYC_Top_of_the_Rock_Pano

New York is not Toledo, Minneapolis, Philadelphia,  Sacramento or even Boston and it’s probably not Atlanta either.  New York City is a “World City”. It’s competitors are London, Paris, Rio, Tokyo, and probably Singapore and Beijing. New York is the financial capital of the world–home to the United Nations. It is a city of eight million human “stories”. Sure, it has loser baseball and football teams–but it has two of each (sorry New Jersey). World  Cities compete in a different league than average or even very large national cities. world cities are not inexpensive places to live. World cities are often (not always) ports of entry for immigrants and business. Thirty-seven per cent of New York City’s current residents are foreign-born. Immigration into a world city is notoriously bi-modal–extremely rich and uncommonly poor. Not everybody who lives in a world city is a legal citizen. New York City, in addition, has traditionally served as Puerto Rico’s (and Dominican Republic) entry into the U.S. Mainland–and Puerto Rico in recent years has suffered from massive economic difficulties, and currently is dangerously close to bankruptcy (or whatever a federal territory is classified as when it goes broke). Puerto Rican rates of emigration have accordingly been very high. Thus Bloomberg’s famous 2003 utterance:

If New York City is a business, it isn’t Wal-Mart–it isn’t trying to be the lowest price product in the market. It’s a high end product, maybe even a luxury product. New York offers tremendous value, but only for those companies able to capitalize on it.

(Bloomberg speech, January 2003 reported by E.J. McMahon, Manhattan Institute for Policy Research, Civic Report No. 47, November 2005, “Pricing the ‘Luxury Product’: New York City Taxes Under Mayor Bloomberg)

The “Luxury City” expression was set in motion by Bloomberg himself during his first year in office. As Bloomberg defended his shift away from Guiliani’s incentive-driven business retention, “don’t move to New Jersey”, and attraction program, Bloomberg explained that he wanted to move away from using incentives to attract firms to NYC. Rather, he wanted to target those firms which could profit from NYC’s assets and could afford NYC’s high cost structure. The expression “luxury city” originated from a McKinsey & Company study commissioned by Bloomberg shortly before his taking office. McKinsey was asked to evaluate New York’s market position both in the United States and “the whole wide world”. Using a SWAT methodology, McKinsey observed that city’s strengths included a large educated talent pool and cosmopolitan culture; as weaknesses, McKinsey cited the obvious high costs (taxes, real estate and cost of living).  The conclusion drawn from McKinsey’s assessment was that New York City should market itself to those who valued or needed its strengths and who could live with the its weaknesses. Certainly, a cynic could say this conclusion is pretty much “if you’ve got a lemon, make lemonade”–but that’s not fair and probably does a city like New York a disservice.

Accordingly, our first caution for the reader is that New York City’s principal economic development competitors do not include Springfield, Massachusetts, Hartford Connecticut or even Trenton/Jersey City, New Jersey. For Bloomberg, luxury city is a marketing concept used to define New York City’s real competitors–other World Cities.

For those of us familiar with economic development, if this statement is meant to be a comprehensive New York City economic development strategy, it seems a bit weak in the robustness department. By that I mean there’s not a lot of moving parts in this so-called strategy. The Curmudgeon doesn’t really see luxury city as a comprehensive economic development strategy at all; it’s merely part of its attraction/retention program. For Bloomberg, a novice politician, “luxury city” was little more than a business marketing metaphor and a justification for re-positioning the City’s marketing and re-targeting its incentive rationale–a re-targeting that makes lots of sense given New York City’s status as a high cost business climate World City.

The Revolution Cometh

The Revolution Cometh

It was not his marketing re-targeting, however, that led to “the luxury city” debate; it was his continued assertion in subsequent interviews that the firms and their employees located in the City paid a disproportionate share of the taxes needed to maintain vital services and address the needs of those who were not yet in the mainstream economy.  He never backed away from this observation throughout his entire Administration. An example of this accurate, but controversial, linkage is one he provided in an interview during the De Blasio 2013 campaign:

The way to help those who are less fortunate is, number one, to attract more very fortunate people. They are the ones who pay the bills. The people that would get very badly hurt here if you drive out the wealthy are the people he (De Blasio) professes to try to help. Tearing people apart with this ‘two cities’ thing doesn’t make any sense to me. It’s a destructive strategy for those you want to help the most…. but this city is not two groups, and if to some extent it is, it’s one group paying for services for the other. (Interview with New York Magazine, 2013)

Linking the rich and big firms to pay for social services to “the other half”  (Jacob Riis) of New York City, however, is asking for trouble. That link, to which Bloomberg himself called attention, between large resident corporations and the financing of New York City social/education services opens the door for a “two cities” attack. Luxury city is just the portal-buzz phase which leads into the “two cities” critique. The “tale of two cities” dialogue in which Bloomberg willingly assumes the role of Sydney Carton (the one who got his head chopped off) is the more serious criticism.

Asking For Trouble: Two Cities as Neoliberalism

Serving three terms as New York City mayor provides plenty of opportunity to be criticized. The most visible and earliest two cities critique was made in Julian Brash’s, Bloomberg’s New York: Class and Governance in the Luxury City, but the concept has also been the center point behind Danny Katch’s “Mayor Michael Bloomberg: A Depreciation”, International Socialist Review, Issue #90 and Dan Steinberg, “Planning the Neo-liberal City”, New Politics, Vol. XIII, No. 4. To the Curmudgeon, the unifying element in the wide diversity of luxury city/two cities critiques is class, i.e. social class–rich versus poor–that kind of thing. The second unifying dimension is that proponents of Luxury City/two cities critique view Bloomberg as a “neo-liberal”. The two elements tend to travel together.

As background for the reader, “two cities” proponents view capitalist corporate elites as using the city to serve their self-interests– i.e. make a profit. This can be done by their controlling the political class elected to lead the city, or secondly, to physically grad a hold of key elements of the Mayor’s economic development strategy (usually physical redevelopment, deregulation and tax cuts) so the corporate elites can transform the city, urban-renewal style, so that portions of the city are physically redeveloped to build new projects for these elites. In this physical redevelopment, existing residents, the poor mostly, are removed, displaced, and uprooted to new areas unwillingly. The rich achieve their profits by manipulating urban America to the inevitable detriment the poor (sometimes the middle class and mom and pop business as well). The real estate and developer community (FIRE) are the most commonplace culprits–but big business capitalism is the ultimate cause of the problem. This generalized description of the two cities critique overlaps, very, very closely with the standard critique used in recent years against something called Neo-Liberals and Neo-Liberalism. [From this point on we will not use hyphens in neoliberal or neoliberalism except in quotes]

So the next issue is what the heck is neoliberalism? First of all, despite the existence of a very large amount of literature on the topic, there is not an easily understood and consensual definition. Almost everybody who writes about or uses the “concept”/economic approach defines it to fit their particular approach. It is fruitless for us in this relatively brief review to enter into a precise definition.  Investopedia defines neoliberalism as:

An approach to economics and social studies in which control of the economic factors is shifted from the public sector to the private sector. Drawing upon principles of neoclassical economics, neo-liberalism suggests that governments reduce deficit spending, limit subsidies, reform tax law to broaden the tax base, remove fixed exchange rates, opening up markets to trade by limiting protectionism, privatizing state run business, allow private property and back deregulation.

Tales_serial

Neo-liberalism first jelled during the late 1930’s and came into prominence in the post-World War II period. In more current days, Ronald Reagan and Margaret Thatcher are held to be examples of neo-liberals in office. Some even called Clinton a neo-liberal. That’s the problem with a fairly loose set of definitions. The thing is most active politicians and economists do not define themselves as neo-liberals or advocates of neo-liberalism, they are labeled as neo-liberals by others. One does not go down to the Auto Bureau and register as a neo-liberal; the usual procedure is to read in an academic journal or magazine that you are, in fact, a neo-liberal. Few outside academia, the disciplines of economics/planning/ and maybe political science specifically have even heard the word before. Being called a neo-liberal is not meant to be a compliment, like neo-Keynesian is. Nobody in their right mind wants to be willingly called a neo-liberal. It’s like admitting to be an old-style “robber baron” or the banker (Mr. Potter-Lionel Barrymore) in “It’s a Wonderful Life”. “Two cities” is a proxy for “Bloomberg is a neo-liberal” and the expression bridges the gap between academia and the voter.

If the proponents of the luxury city/two cities approach are the opposite of this, then we can reverse the above definition and at minimum suggest their core issue is to shift control of “the economic factors” from the private sector to the public sector. Essentially for those opposed to neoliberals and neoliberalims, the private sector, economics and the economy, should be subject to democratic controls and accountability and the ends of economics, the practical results of economic growth ought to be to help the citizen and resident as opposed to the corporations and the individual capitalists. Antagonists of neoliberalism are usually upset because the normal way neoliberalism operates is that the private sector indirectly is able to dominate, or manipulate, the public sector, i.e. government, thereby distorting elections and overturning the more legitimate ends of public policy. So, the neoliberals get their proxies to run for office, and then they get their proxies to intermediate with the citizen and resident.  Government, in varying degrees, is made into a tool of the neoliberals and government policy serves, not the average citizen, but the interests of the neoliberals and their corporations.

But Bloomberg screwed things up and got himself elected three times as mayor. Bloomberg eliminated the middleman. Bloomberg, “the Neo-Liberal”, would directly and legally run the city government. There in lies the nexus of the current Bloomberg’s luxury city/two cities critique. Bloomberg, by sheer dint of his biography fits is the personification of the neoliberal. The problem with Bloomberg as mayor, however, is that he departs from the conventional model by which the neoliberal  is supposed to operate by directly and personally controling the city. Bloomberg is his own intermediary with the citizen, voter and tax payer. That he was elected for three terms is not only an outrage, but a reality that demands some explanation.

Accordingly, Brash and the others allude to “the Bloomberg Way” so to describe the neoliberal as mayor.  “Got himself elected” is the right choice of words, because to the luxury city/two cities proponents Bloomberg bought these elections literally–and the third term he not only bought, but compelled city government to make the legal adjustments which made that possible. There is some truth to these charges–that Bloomberg fits the description of a billionaire “plutocrat”, that he spent so much in the elections and was a shade heavy-handed the third term elections–provides a level of acceptability to the larger argument. Once in office the independent fortune of the mayor provided Bloomberg some insulation against the populist media as well as access to key private and public decision-makers which was so important in his economic development program. Also Bloomberg was able to recruit and sometimes pay for the “best and the brightest” to staff his administration. The ability to finance his own election was critical to his independence. Plutocracy yes. but also a mayor able to keep some distance from constituencies, such as unions and neighborhoods. He was the “mayor who couldn’t be bought”–or controlled by traditional New York City powers that be. But if having lots of money and using it to get elected got Bloomberg off on the wrong foot to begin with, the obvious reality that he easily won his elections raises disturbing questions. Why did voters vote for him being the most basic?

Citi-Field (2009): Where the Red Sox Beat  the Yankees

Citi-Field (2009): Where the Red Sox Beat the Yankees

The explanation was Bloomberg the man and his style of leadership–“the Bloomberg Way”:

‘The Bloomberg Way’ refers to an ostensibly pragmatic, non-ideological approach to urban governance that places a premium on management skill, technical expertise, and data-driven evaluation. In its core formulation, the mayor serves as CEO, the city government is a corporation, business and residents are clients and customers, and the city itself is a product to be branded, marketed and developed, On this logic, the city’s bottom line depends on its ability to generate more property tax revenue, which therefore is a primary consideration when it comes to land use policy and economic development. The flip side, of course, is that distributional concerns–for example, the quality of jobs produced and the impacts of public actions on the stability of neighborhoods and fragile networks of small businesses–are of secondary importance at best. [Steinberg, “Planning the Neo-liberal City”, p. 2]

Bloomberg’s vision of making New York City a ‘luxury product’–a high status habitat of waterfront playgrounds and neo-artisan style designed to attract the international elite and keep the local middle class wanting to stay despite the sticker shock. On the other [hand] this program of urban renewal for the rich has barely touched the majority of the city’s people who have fallen deeper into poverty and near-poverty. [Danny Katch: “Michael Bloomberg” p. 3]

Brash charges that Bloomberg the neoliberal mayor and his brand of neoliberal economic development rejected the right of those disadvantaged by Bloomberg’s policies and strategies from defending themselves through political conflict and opposition. NIMBY, a traditional enemy of economic developers, in his mind is the legitimate opposition of those hurt, just as gentrification, usually viewed as success by an economic developer, is viewed by the two cities advocate as a defeat for those residents displaced or disadvantaged by the success of the more wealthy/middle class moving into the neighborhood. Hudson Yards and the Atlantic Project are victories of the corporate rich over the residents and small business in these areas– and are not for the greater good of the City as a whole. In this dialogue there is a battle between technocrats and the people–between experts with their plans and strategies—and the community. There is a whole lot of existentialism going on here! This is a circle that is not going to be squared any time soon.

The First Neoliberal

The First Neoliberal

Bloomberg (a member of the Transnational Capitalist Class) and his “best and brightest” administration (the Professional-Managerial Class, in our case Deputy Mayor Dan Doctoroff, Deputy Mayor for Economic Development) took over through elections which Bloomberg “bought” and used government to cram down through planning, economic development projects/incentives and branding a set of policy goals and programs which ran counter to the interests of the average citizen, the lower classes, small mom and pop business, immigrants, and neighborhoods of color. Bloomberg advanced the interests of his neoliberal chums (transnational capitalism) directly by controlling government himself. De Blasio, in adopting major tenets of the luxury city/two cities critique, placed himself, his campaign, and his future Administration as a departure of the neoliberal domination of city government. He would require politics, economics, planning, and economic development to serve the interests of those outside the neoliberal capitalist framework.  Whether or not all this is an attack on specific Bloomberg’s economic development program and strategy is unclear–at least to the Curmudgeon.

Now whether that is what the voters actually voted for–well, that is another matter. Bloomberg wasn’t defeated; he was termed out. No doubt, after twelve years in office, many simply wanted a new face and a new approach and in a one party city, De Blasio was the guy who came out on top.

The Curmudgeon Intrudes and Concludes

While the Curmudgeon sees luxury city marketing strategy as appropriate in a competitive world cities environment, the opponents to the luxury city see it as a selling of the city and its residents to capitalist bidders for locating in the geography where they can best make profits–at the expense of those who are already living and working in such geographies. Does this conflict in approach raise the issue of whom should be the immediate beneficiary of an economic development strategy or tool? Does it question the conventional economic development notion that helping business and its elites is the best way to “raise all boats”? Of course.

The luxury city/two cities debate penetrates the crux of what economic development is and who and how it is supposed to help. Economic developers, usually without a great deal of forethought, work for “the city”–all its residents and tax payers–for the city “as a whole”, “the greatest good for the greatest number”. Proponents of the luxury city/two cities approach, however, see this conventional economic development perspective as constructing an abstract entity (the city as a whole) which doesn’t really exist. What exists to them is the average or poor person who is being exploited by an economic system run by corporate plutocrats and served by their technocrats (economic developers fitting into that group).  Anti-Neo-Liberals do not advocate for the city as a whole, but for the less advantaged in that city–and helping rich get rich and hoping that some tidbits will drop from their table through trickle down is not what “they are about”. Julian Brash?  points out this divergence, this zero-sum politics, very well.

The irony to the Curmudgeon is that to him Bloomberg was, at best, an indifferent neoliberal. Neoliberals were supposed to cut taxes and fees–Bloomberg increased them a lot. They are supposed to deregulate and Bloomberg, among other things, stopped me from driving through Times Square, and took away my salt and Slurpee. His affordable housing program may not have been all that everyone wanted it to be–it certainly was large in scale and expensive. His takeover of the school system was meant to make it better, not prepare it for a charter school future–and he paid the teachers more and hired more of them. Bloomberg was big on public-private partnerships (arts and culture, as well as workforce and schools) and his physical redevelopment projects fit the neo-liberal mold, but he used the “State” (city government) a great deal.

The Mayor calls the “two cities” attack a class war–and that label is not unreasonable. My take is that most proponents of the luxury city/two cities attack Bloomberg and his economic development programs because he is the personification of a Neoliberal–which is bad, very bad. Done by somebody else–somebody who did not coin ” the Bloomberg Way”–the Curmudgeon is not sure they would have had as much of a problem or gathered as much momentum. In other words, their criticism may be more political and personal, than economic. For the rest of us, absent a mayor such as Bloomberg (the neoliberal who runs the city directly without a middleman)–it is less likely that we will see the luxury city/two city debate come up in your big city. College and university towns may be more susceptible because of a more academics voting.

The luxury city critique is mostly associated with world cities such as New York City. Most economic developers don’t work in a world city and would be nuts to try to copy the luxury city brand. For NYC, however, the luxury city seemed quite appropriate;  at a minimum it defines its attraction program in terms relevant to its real competition–and it takes NYC out of the headline-grabbing ” let’s make a deal” of Texas, or the slavish and incompetent humiliation of Maryland attracting “House of Cards”.

But as the Curmudgeon signs off, he ends by observing that the debate does alert/reacquaint the economic developer to the bi-polar nature of his/her profession. Most of us, while we may be quite “progressive” in our personal politics (or not), as professionals we can be attacked as being intermediaries in the this so-called neoliberal domination of the city for private profit. Certainly, it is awfully hard to do economic development without working “WITH” the private sector. We do frequently help millionaires make more money. And a rising tide may raise most boats–but a few don’t make it and get broken to pieces on the rocks. Few, if any of us, want to hurt those who cannot defend themselves–and yet we are ambivalent about letting those folk defend their perceived interests. The Curmudgeon personally has used eminent domain, hated public hearings and said (still says) many an unkind word about NIMBYs and BANANAs. Being an economic developer may mean one is resident of both of “the two cities”. That is a bit awkward.

As I said earlier, there is a lot of existentialism in our profession and that circle raised in this review is not going to be squared very soon.

The Stock Exchange on Wall Street

The Stock Exchange on Wall Street

 

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