The Golden Age of American Cities—and What's Really Behind It

The United States' urban revival has more to do with markets than mayors.

The New York City mayoral race is entering its final days, and it seems all but certain that Bill de Blasio will be the new master of City Hall. That’s prompted anxiety among some in New York, best encapsulated by an ad run by Republican challenger Joseph Lhota warning that the city would revert to a 1970s crime-ridden cesspit if de Blasio is elected.

Not only is this fear misplaced, but it represents a deep misunderstanding of what has transpired in New York, the United States, and much of the developed world in the past two decades. The transformation of New York and a plethora of American cities into thriving and relatively affluent hubs in the past 20 years is not, as is widely believed, the product of astute mayors and innovative policing. Rather, cities have been transformed because their residents and industries have transformed them.

That is not the common story. In New York, the legend goes that Mayors Rudy Giuliani and Michael Bloomberg turned to the innovative policing of two-time commissioner Ray Kelly to end the deleterious waves of crime, reduce the red-tape, repair crumbling infrastructure and make the city hospitable to business and commerce.

Undoubtedly, New York became a vastly safer place over the past 20 years, with violent crimefalling 75 percent since 1990. It also became a far more affluent place as the rise of Wall Street and high finance enriched the city’s coffers (though not as much as many believe, given how many of the winners of the finance sweepstakes do not live in New York City itself). The burgeoning of new media and startups during the Bloomberg years and the attraction of the city as a hub for entrepreneurs in Brooklyn and Lower Manhattan only cemented that process.

Yet how do we explain the fact that these trends occurred throughout the United States in city after city, when those cities had their own mayors, their own police chiefs, and none of which did the bidding of New York?

The common belief is that the drop in crime is due to astute policing, especially to the “broken windows” theory that pointed officers toward small crimes in the belief that preventing petty lawlessness would prevent more serious crime. That approach was embraced by Giuliani and by mayors around the country. Yet many criminologists doubt those claims, and question whether different policing had much to do with the stunning drop in crime throughout the United States over the past two decades.

Outside of New York, there have also been astute mayors in many cities during these years: John Hickenlooper in Denver, Thomas Menino in Boston, Gavin Newsom in San Francisco, Wil Wynn in Austin, Shirley Franklin in Atlanta, and Richard M. Daley in Chicago. All of those cities and many more witnessed similar drops in crime along with a substantial revival in economic activity, a revitalization of decrepit neighborhoods, and an improvement in city finances and infrastructure.

You would be hard pressed to find too many commonalities in these mayors. Some adopted similar policies, but so did mayors in cities that did not fare so well, like Rochester, New York or Wichita, Kansas. Other cities also boomed in these yeas — Tulsa, Omaha, Houston, all of which benefited immeasurably from the rise of select commodities such as oil and gas in Houston and Tulsa and grain in Nebraska.

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Zachary Karabell is Head of Global Strategy at Envestnet, a financial services firm, and author of The Leading Indicators: A Short History of the Numbers that Rule Our World. More

At River Twice Research, Karabell analyzes economic and political trends. He is also a senior advisor for Business for Social Responsibility. Previously, he was executive vice president, head of marketing and chief economist at Fred Alger Management, a New York-based investment firm, and president of Fred Alger and Company, as well as portfolio manager of the China-U.S. Growth Fund, which won a five-star designation from Morningstar. He was also executive vice president of Alger's Spectra Funds, which launched the $30 million Spectra Green Fund based on the idea that profit and sustainability are linked. Educated at Columbia, Oxford, and Harvard, where he received his Ph.D., he is the author of several books, including Superfusion: How China and America Became One Economy and Why the World's Prosperity Depends on It (2009), The Last Campaign: How Harry Truman Won the 1948 Election, which won the Chicago Tribune Heartland Award, and Peace Be Upon You: The Story of Muslim, Christian, and Jewish Coexistence (2007), which examined the forgotten legacy of peace among the three faiths. In 2003, the World Economic Forum designated Karabell a "Global Leader for Tomorrow." He sits on the board of the World Policy Institute and the New America Foundation and is a member of the Council on Foreign Relations. He is a regular commentator on national news programs, such as CNBC and CNN, and has written for The Wall Street Journal, Newsweek, Time, The Washington Post, The New Republic, The Los Angeles Times, The New York Times, and Foreign Affairs.

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