Here Are My Thoughts on Metropolitan Revolution, Now Go Buy The Book And Make Your Own Thoughts On Metropolitan Revolution

I saw a wonderful talk this week, thanks to LSE's inexhaustible list of stimulating events, about what will be the locus of American governance in this century: the metropolitan area. Bruce Katz, Vice President and Director of the Metropolitan Policy Program at Brookings Institution and author of Metropolitan Revolution, made a strong case for the idea. Especially when considering how dysfunctional Congress has been at tying its own shoes, let alone planning the American economy in 50 years, he's pretty convincing.

Katz's line of thinking is really enticing, and I suggest you check out the book. I'm not here to rehash his lessons of how networks of business, non-profits, and local governments can change the trajectory of their cities; he can do that much better than I can (in fact, he wrote a whole book about it). But I do have a couple of related thoughts to share.

The Model That Won't Work

One of the points that Katz emphasized most was that his idea of metropolitan governance is not just a mayor schmoozing or county commission legislating: it's about all of a city's stakeholders coordinating their efforts to better the city. It's a network of partnerships, and they come in different forms for different metro areas.

Katz focused on the models that work, which is great for other regions to take lessons from. But there are some models that won't work. This is where I'd categorize an idea that, unfortunately, gets used too much: giving away your city.  Don't be the mayor or governor who gives away the farm just to keep a sports team or be the home of one new factory. 

When a city is down on its luck, that kind of desperation is tempting. If for nothing else, it's a crowning achievement to put in a reelection commercial (look who brought jobs to Desperationville!). But in the long run, it can be a destructive choice. Many times it will take the form of broad local tax breaks and incentives.

These tax schemes can shrink a city's property tax revenue for the next fifteen or twenty years - and if a city is already struggling, that squeezes their ability to afford the civic improvements that will organically attract businesses. Even then, a twenty-year property tax easement is no guarantee that a factory or new office will stay for that long. Sometimes, after cities bend backwards to give deals to relocating businesses, they close up shop a few years later, leaving nothing but a sore spot.

That's my tip No. 1: Don't be the desperate high school boy pleading with girls to go to the dance with him. 

Is Metro-Wide Specialization Bad?

On the whole, I really like the broad, yes-we-can attitude of Metropolitan Revolution. My concern is less of a concern and more of a question with which I'm still grappling, one that deserves more thinking.

Based on the case study that Katz writes on Portland's green-tech export boom, I infer that heavy specialization in an industry is a great recipe for economic success. In Portland, as the story goes, remained full of hippies past their usual disappearance date of circa 1971. Those hippies and their children eventually got involved in green-tech manufacturing and are now exporting large and growing amounts of these goods.

    But is this degree of specialization a sound recommendation, especially for mid-market-sized metropolitan areas? Maybe my own anxieties are shading my judgment, but isn't a local economy so heavily focused on one industry a bit risky in the long run? Now, I agree that specialization is necessary (you've got to have a comparative advantage in something ), but I would feel much safer if my city diversified into, say, three major industries.

Think of what could go wrong with single-sector specialization: Civic leaders would have spent a couple decades making One Trick Pony City the number one destination for the widget industry. Now, the widget industry dies a merciless death due to some external force. It could be the low cost widget plants overseas, a financial crisis, or a new technology that makes widgets as obsolete as pagers. What does that city have now, besides widget makers and widget-focused venture capital firms? Not much, and it'll take another couple decades for One Tick Pony City to find its next obsession.

There is of course another take on specialization that sounds quite bit like the "jack of all trades, master of none" concept. Maybe Portland has been so successful because it didn't focus on green-tech and  agricultural machinery and  retail management. Maybe it would have been wallowing in slow-growth like other similar cities if it had. Mid-sized cities don't have the seemingly unlimited masses of New York and Chicago to support a world-class industry in every sector. Maybe they really do have to pick one thing and be good at it. Who knows - but at least we should keep thinking about it.  

We should keep thinking all the issues brought up in Metropolitan Revolution , not only because it is full of usable ideas but also because the US doesn't think about its cities enough. If they are going to be as important to setting this century's economic trajectory, they certainly need a lot more attention. This book will help with that.