Wednesday, October 21, 2015

How to save the big cities...

How to Save a Dying City in Four Steps... Or Maybe Five
Gary North

Detroit and Chicago are models of urban failure.

The decline of both cities visibly began around 1960. That was when a decade of Democratic control merged with the federal government to turn these cities into welfare state disasters.

This had begun in the New Deal. But it took a quarter century for the process to begin to become visible. Whites began moving out. The suburbs continued to grow.

James Curley of Boston had begun this process even earlier. He was the model for the mayor in the novel and 1958 movie, The Last Hurrah. Tax by tax, he penalized the productive middle class. They started leaving.

Everyone knows abut Detroit. They are learning about Chicago. The public schools are not salvageable. Charter schools are the last remaining hope of the city to retain white, upper class, taxable citizens. The city council has just passed a new property tax. They have exempted all homes under $250,000. This will make other cities in the region more attractive.

The four major employers in Chicago, in this order, are these: the federal government, the public schools, the city, and Cook County.

George Will has written an insightful essay on the plight of the city. Amazingly, the Washington Post reprinted it.

Young college graduates like to live in cities. Given incentives, they live in downtown areas. But they can be kept out by high taxes. They are the future of any city.

They are outvoted by inner city welfare-dependent voting blocs. So, they leave. This is not a new phenomenon. It has been going on since 1946. The suburbs grow faster.


First, declare bankruptcy. This makes possible the next three steps. Second, default on all pensions. Third, close the public schools. Fourth, cap the property tax at 1% of market value. That was the limit placed on the municipal governments in California in 1978: Proposition 13. Voters in the state approved a constitutional amendment that tied the hands of city governments to loot the residents.

There is a fifth step: imitate Houston. Abolish all zoning. But this is not as important as the first four steps.

The price of real estate would rise, as it has in Los Angeles County and Orange County. The auction principle of "high bid wins" would take over. Productive people would stay. Less productive people would leave.

There are other steps that would help cut expenses, but the main expense is public education. This is no longer required. The Web can provide everything free of charge.

School districts would make available the following option to fired teachers with contractual tenure. They would get a severance pay bonus of $50,000 for putting their classroom courses on the school district's free education website. These videos would be hosted free on YouTube. This costs the districts nothing. Districts would pay for a full-time webmaster for the district's courses. This could easily be paid for from the proceeds of the sale of surplus public school campuses.

These videos would allow comments. There would be Facebook "likes." Word would get out fast: like vs. dislike. Parents could choose which teachers are best.

Voters would also see how incompetent most of the former teachers were.

There would be thousands of courses online for free, as school districts and cities close schools and fire teachers.

Word will get out. Two-dozen teachers nationally in each course will get half of the students. They will get rich by selling workbooks, updated videos, and so forth. They will be superstars. Districts will court them, the way that universities pay $250,000 a year to superstar professors.

Without high-cost schools to pay for, city costs would drop. Without pensions to pay for, the second-largest cost would go away. Taxes would be tied to market property values.

The middle class would stay. The cities would grow. They would not get cheaper to live in, but jobs would multiply. Taxes would not eat up families' futures.


Something like this scenario is going to happen over the next three or four decades. The voters will fight it initially. So will the municipal unions. But the Great Default is coming. The welfare checks for the elderly will stop coming from Washington. These families will sell their homes to younger families to get money. They will move in with children. This is how families have dealt with old age from the beginning. We live in anomalous times. Voters will decide that it is time to cut local property taxes.

We know what the future of education is: video-based online education. The Khan Academy is proof. So is the Ron Paul Curriculum.

Public schools will eventually be forced by finances to adopt online, video-based education. Some states have begun the transition. For a list of online distance learning programs, state by state, click here. The stigma of distance learning is over.

Instead of vouchers, districts will offer a cheap Chromebook for each child and free high speed Internet hookups to inner city families that cannot afford this. The cost per home school student will drop to maybe $500 a year. This will replace today's $12,400 per student -- higher in large cities.

In 20 years, millions of middle class families will educate their children at home online. It will be a mark of social failure to have your children in the public schools -- anyway, non-charter schools.

Voters will still want free babysitting at taxpayers' expense. There will still be charter schools. Charter schools will use YouTube videos in classes with student-teacher ratios of 40 or 50 to one, above grade three. Students will sit in carrels. They will wear headphones. Discipline problems will be dealt with by expulsion. "Educate your child at home. Discipline him." The public schools will finally start providing safe environments. Headphones will reduce discipline problems to a minimum. A high student-teacher ratio will cut expenses.

The teachers above the 5th grade will be coaches. The voters want free sports. Give the coaches something useful to do: keep order.

Then 80% of all school administrators will be fired. Who will need them?

There will be middle-class flight out of the schools in any district that refuses to adopt YouTube-based education in the classrooms. The voters will then be ready to shrink the school budgets.

Surplus public school campuses can be sold to private schools that use YouTube-based education.

Then what of the teachers' unions? Gone with the wind.


Cities should be growing. Most people like to live in them.

The welfare state policies of urban voters are strangling some large cities. Detroit and Chicago are obvious examples. Creative, productive people move to the suburbs, or else they move to less oppressive cities.

When the Great Default comes, it will be time to buy investment homes in bankrupt cities. The ability of the state to keep funding the welfare state programs will decline. Sacred cows will be sacrificed on the altar of bankruptcy.


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