More and Less: Justice and the Plight of the Poor

“With the help of well-designed experiments, you can see glimmers of moral thought, moral judgment and moral feeling even in the first year of life. Some sense of good and evil seems to be bred in the bone.”

-- Paul Bloom, “The Moral Life of Babies,” New York Times (9 May 2010)

This week, Annie Lowrey of the New York Times wrote a terrific, front-page story on how the poor in America have much greater access to material goods than in generations past, yet feel as if they are falling farther and farther beyond the middle class. As James Ziliak, director of the University of Kentucky’s Center for Poverty Research, stated, “Without a doubt, the poor are far better off than they were at the dawn of the War on Poverty. But they have also drifted further away.”

If people are better off, why does it matter if they’ve “drifted away” from the middle and upper classes on a relative scale? If the rising tide lifts all ships, what difference does it make if some seas rise faster and taller than others?

As it turns out, it makes every difference in the world—and not just in America, but also across most societies in every corner of the globe. Why? Because rising inequality, no matter how improved the objective standard of living is for individuals across the board, offends something deep within us—an innate sense of fairness, justice, and opportunity.

As Paul Bloom wrote in 2010, “You won’t find a society where people don’t have some notion of fairness, don’t put some value on loyalty and kindness, don’t distinguish between acts of cruelty and innocent mistakes, don’t categorize people as nasty or nice.”

As a result, it should come as no surprise that people are frustrated—even enraged—by how an emphasis on conspicuous consumption has replaced a more fulfilling vision of the American Dream with a vacuous conception of liberty and success.

For far too long, American policymakers have focused on “expanding the pie”, as if GDP growth was gospel sent down from on high—the embodiment of our collective pursuit of happiness. As we’ve explored in this space, however, achieving happiness is a much more complicated task than economic growth. It requires a deep understanding of human nature; a critical examination of the true material needs (as opposed to wants) of individuals, and a commitment to investing in the foundational elements of true prosperity—the infrastructure of opportunity.

That infrastructure is physical—inter-city high-speed rail, urban mass transit, affordable housing, reliable water/gas delivery, clean power—and human—education from K-graduate school, social institutions, mobility (where health care attaches to you as a human rather than an employee), and substantive and procedural justice.

Erecting this infrastructure is a mission statement that acknowledges that government’s primary role is to lay the groundwork (including a robust social safety net) for people to life the lives they’ve imagined, but that the State must also take aggressive steps, as necessary, to allay levels of inequality that threaten to create a “gilded class” (if Thomas Piketty is right that, over time, the rate of return on capital is greater than the growth rate of the economy, then individuals who start with capital are very likely to accumulate more) and undermine the citizenry’s belief in the very idea of Republican government.

While the incredible reduction in extreme poverty worldwide has brought billions of people the bare necessities of life, there remain 1.2 billion people living on less than $1.25 per day. These individuals remain in desperate need of economic growth and actions to address inequality. As the Economist noted last year, “Growth alone does not guarantee less poverty. Income distribution matters, too.” Indeed, while two thirds of the fall in extreme poverty was the result of economic growth; one-third came from greater equality.

As the cartoon above implies, the world has enough—enough to feed the hungry and shelter the homeless, enough to treat the sick and heal the injured. However, that bounty means little unless extreme poverty is eradicated in the developing world (an achievable goal by 2030) and unless the developed world creates an infrastructure of opportunity commensurate with our innate belief that all people deserve an equal chance to succeed.

The New Gateway to the Middle Class: Tech and the Role of Gov’t

“Education then, beyond all other devices of human origin, is a great equalizer of the conditions of men—the balance wheel of the social machinery.”

--Horace Mann, Secretary of Massachusetts State Board of Education, 1848

Last week, BetaBoston published a piece titled, “Tech, the great equalizer, still struggles to make it to Dudley Square,” about still-nascent efforts to bring the opportunity of the Boston tech ecosystem to neighborhoods in need of economic development, such as Roxbury and Dorchester.

Incubators like DreamFactory and Smarter in the City are essential to ensuring that entrepreneurship—the 21^st century ladder to the middle class—is available to all. However, I believe that the very title of the piece is indicative of a misunderstanding of how government can and should help the tech economy to thrive in all neighborhoods. The great equalizer is not tech. Instead, as Horace Mann noted 165 years ago, it is education.

The clustering effects seen today in New York City’s “Silicon Alley” or the Massachusetts Avenue corridor from Harvard to Kendell Square in Cambridge are the result of proximity to talent—the straw that turns the drink of any industry, particularly one that demands such high-skilled labor.

As important as education is to this puzzle, it is not the only reason why “clusters” have formed in Boston, New York, and elsewhere. Rather, as described in Start-up City, a report I wrote for then-Manhattan Borough President Scott Stringer, creating a tech ecosystem that can power growth for all requires significant public investment in infrastructure, a streamlining of government “red tape,” and measures to ensure that young people can afford to live and work affordably.

When we apply these key ingredients to Roxbury, it becomes clear that we cannot simply divert the tech economy to Dudley Square. Instead, we need to take steps to draw the industry to the neighborhood. Many of these steps are already taking place. Indeed, like many urban neighborhoods across the country, Dudley has experienced substantial change in recent decades, thanks in part to a plunge in crime and innovative programs like Boston Main Streets, which has helped remake neighborhoods into mixed-use, 24-hour communities.

But more must be done. As Ed Glaesar noted in a recent piece on Dudley, private sector investment is essential to the community’s success, which means that Boston must reduce barriers to opening new businesses, including one-stop permitting with guaranteed decision times.

In addition, while Dudley is one of the busiest bus depots in the entire City, the “Silver Line” service that is termed “Bus Rapid Transit” pales in comparison to grade-separated systems in other parts of the world, like Bogota, Columbia or Cleveland, Ohio. The Silver Line doesn’t even qualify as “basic” BRT, let alone warrant a bronze, silver, or gold ranking from the Institute for Transportation and Development Policy.

Thus, 65 years after the Massachusetts Legislature authorized $19,000,000 to build a subway under Washington Street to Dudley Square, the neighborhood continues to be at the margins of the MBTA’s transit network, despite being at the geographic center of the Hub.

As MassDOT found in its 2012 report on transit needs in the neighborhood, the relocation of the Orange Line in 1988 created, “A city with several high-frequency rail lines radiating out from downtown in multiple directions, but with the largest gap between lines coinciding with the location of the city’s highest concentration of minority, low-income, and transit-dependent residents.”

The answer is not to throw out the Silver Line, but to remake it as true BRT, with off-board payment, and a dedicated right-of-way, taking lessons from other cities and transforming the Washington Street corridor in the process.

In college, I taught civics to 8^th graders at Dearborn Middle School in Roxbury, a historic campus that is now in the process of becoming a grade 6-12 STEM-focused institution. In many respects, I had little in common with most of my students. I grew up white and privileged, in a rural town with a two-parent family. Most of my students were black and working class, whose homes were often headed by single parents in multi-story apartment buildings.

But what we lacked in common was more than made up for by their excitement to learn—about how their city/government functioned, about what college was like, about the limitlessness of their own futures.

It is our responsibility to ensure that opportunity is available for these students and all our youth. But it won’t happen overnight and it won’t happen by taking a piecemeal approach to economic development. Instead, government should stick to what it does best—preventing crime, building infrastructure—from transportation to broadband—and making the State a partner, not an obstacle, to business growth.

Building a Better Citizen: "City Scouts" and American Infrastructure

“Whether you choose to become a teacher, a police officer, a doctor, or even the mayor of the greatest city in the world, your experiences as an Eagle Scout will prove invaluable.”

--Michael R. Bloomberg, 108^th Mayor of the City of New York

This week, the Center for an Urban Future released a tremendous report on the sorry state of infrastructure in New York City. While acknowledging the tremendous strides the City has taken in the past three decades (thanks to enormous public investment), CUF concluded, “too much of the city’s essential infrastructure remains stuck in the 20th Century—a problem for a city positioning itself to compete with other global cities in today’s 21st Century economy.”

The truth of this statement was once again tragically made clear he following day, when two buildings in East Harlem exploded. The expected cause: a gas leak from a cast iron pipe buried beneath Manhattan streets for over 125 years.

While the precise cause is not yet known, it is potentially the latest (and deadliest) example of our continued abandonment of infrastructure. In January, a 140-year-old water mane burst on 5^th Avenue, disrupting subway lines and leaving a crater in the middle of one of the world’s most famous boulevards. Even before Sandy, the Straphangers Campaign found that over one-third of preventable delays on the NYC Subway was caused by the malfunction of 70-year-old signals.

If we know that infrastructure is a growing concern—one that affects us on a daily life in potentially catastrophic ways—what keeps us from investing the way we should? Many reasons, but the one that I want to focus on today is the public’s lack of understanding of how our infrastructure works and, in turn, how that ignorance contributes to a citizenry ill-prepared to grapple with aging tunnels, switches, and streets.

In The Works: Anatomy of a City, Kate Ascher describes in vivid, colorful detail the wonders of New York City’s transportation, communication, utilities, and sanitation infrastructure. While I can cop to being an infrastructure nerd, the truth is that everyone who I’ve watched open the book on my coffee table is floored by what is beneath our streets and anxious to learn more.

Of course, we shouldn’t wait till our citizens are adults to have them understand the intricacies of our infrastructure. Instead, by cultivating knowledge and interest early, we can develop citizens already well-versed in how their City functions, and, we hope, ready to do what it takes to keep the trains running, the water flowing, and the for generations.

Enter City Scouts: a co-ed program designed to get urban kids involved in their communities. City Scouts would not focus on outdoor survival skills like traditional Boy/Girl scouts, but would instead dive headfirst into the nitty gritty of the urban environment, albeit the same emphasis on community service and personal growth.

"Badges" would be earned less by proving life skills in the wilderness and more by projects associated with the City (think: FDNY, NYPD, Nursing, Water Tunnels, MTA, Parks, etc.). 

Once troops are up and running in every borough (requiring significant philanthropic support—I’m looking at you, Mayor Mike and David Rubenstein!), City Scout troops would develop partnerships with nearby Boy/Girl Scouts so that that kids from different backgrounds could come together to share their skills/worlds with each other.

The long-term goals of the program are as follows:

1)    To instill a love of the City and an understanding of what makes it run so that the next generation of New Yorkers is full of citizens who understand the invisible backbone of Gotham—the magic of the Water Tunnels, the miracle of the subways, the mystery of the communications network.

2)    To inspire a generation of Americans to view service to their communities as an essential component of good citizenship.

3)    To bring kids together from all different types of backgrounds so that they can learn from each other’s skills and forge bonds that will, over time, prevent the parochial politics that has long infected generations that have come before them.

City Year provides a clear example of the pent-up demand of America’s youth for an opportunity to serve their communities and their nation by living and working in our urban cores.

City Scouts is a natural extension of the same idea—an opportunity for America’s youth—the leaders of tomorrow—to understand and appreciate what makes their neighborhoods work and answer the call to serve.

As the late Senator Lloyd Bentsen, Jr. (D-TX) once said, “I have never forgotten my days as an Eagle Scout. I didn't know it at the time, but what really came out of my Scouting was learning how to lead and serve the community. It has come in handy in my career in government.”

Comcast, General Electric, and The Role of Government in America

“The winners…will be those who…insist on being number one or number two in every business they are in. Don’t play with businesses that can’t win. Businesses that are number three, number five in their market—Christ couldn’t fix those businesses. They’re going to lose anyway.”

-- John “Jack” Welch, CEO, General Electric

Last week, Comcast announced its intention to buy Time Warner Cable in a $45.2 billion deal that will unite the nation’s two largest cable providers. According to the New York Times, the resulting company will operate in 43 of the 50 largest metropolitan markets, and will serve nearly 30 percent of paid television subscribers and about one-third of all broadband Internet subscribers.

Outcry about the anticompetitive effects of the merger has been strong—not only from consumer groups, but from politicians on both sides of the aisle—an unsurprising result given that Americans pay more for worse service than most countries in the developed world.

A 2011 study by Pando Networks found that U.S. Internet speed was 26th in the world and a 2012 study by the New America Foundation found that Tokyo residents enjoy speeds that are eight times faster than New York’s for a lower price. And Hong Kong residents enjoy speeds that are 20 times faster, for the equivalent price.

Many cities—from Lafayette, Louisiana to Chattanooga, Tennessee—have have launched municipal fiber networks in an effort to thwart the monopolistic behavior of the telecommunications industry. 

As Susan Crawford, visiting professor at Harvard Law School [my alma mater] and author of “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” wrote in the Boston Globe this week:

The way to do this is to install a new wholesale fiber network controlled by the city…Cities do not have to be in the business of competing with private providers, but their control of the basic infrastructure is essential to make sure that competition emerges.

We’ll talk more about the nation’s connectivity problems in another post, but today, I want to use the struggle to find a solution for sluggish Internet to examine how we should outline the scope of government in the 21^st century.

For guidance, let’s go back 30 years to one of the seminal philosophies in American corporate history: Jack Welch’s effort to streamline General Electric into a capitalist juggernaut.

Welch—a native of Peabody, Mass. who grew up in Salem and later graduated from the University of Massachusetts—famously scribbled his philosophy on a napkin during an interview with Forbes Magazine in 1984 (see picture, left).

The picture shows GE’s three “core” businesses, from Welch’s perspective, as well as other non-core businesses that were either number one or number two in their respective fields. For businesses that failed to fall into one of those two buckets, the solution was brutal and short, "Anything outside the circles we will fix, close, or sell," Welch said.

This philosophy was anything but charitable. In his first five years as CEO (1981-1986), Welch slashed 130,000 jobs – 1 of every 4 workers at GE. However, those who remained were the beneficiaries of a more directed, stable, profitable company, which grew shareholder (and worker) value.

Welch’s leadership of one of America’s flagship companies provides meaningful guidance on how we should go about determining the size and scope of government in America, his misguided statements about the growing chasm between executive and worker pay notwithstanding.

Government, unlike private business, does not always have a legion of natural competitors (national defense, for instance). However, government does compete with the private sector in a variety of ways (public universities and the Postal Service just to name a few). I believe that defining the role of government starts by examining what you want government to do and placing it into one of the four boxes of the two by two matrix below:

 

          I.     Things government does well that private industry also does well

        II.     Things government does well that private industry does poorly

      III.     Things government does poorly that private industry does well

      IV.     Things government does poorly that private industry also does poorly

Like Welch’s three circles, we should examine everything that government does through this matrix to determine where to “fix,” where to “close,” and where to “double down.”

Let’s start with the easy stuff in boxes II and III.

We should be doubling down on government investment in functions falling into box II, not only because government excels, but also because there is no logical alternative. Many of these functions are so-called “natural monopolies” such as water and national defense (though there is admittedly some question as to whether government does well in these categories—more on that later).

We should completely eliminate functions in box III, where government is a woeful failure and private industry does fairly well. Venture capital (“picking winners and losers”) is perhaps the most obvious example of this, though others surely exist.

Now things get tricky. What do we do with box I? I believe that we should neither buy or sell, but “hold” our investments in these areas and take advantage of the private sector mechanism where feasible. For instance, few government investments are as beneficial as higher education and research and development. However, private universities (here’s looking at you, MIT) are incredibly successful at putting these dollars to work. Thus, government should continue to provide public higher education (particularly to provide low-cost alternatives to students of lesser means), while also pumping billions of dollars into R&D at America’s private colleges and universities.

Lastly, we come upon the bane of our existence: box IV. The first question to ask is whether the function need occur at all. Assuming that the answer is yes—and that someone has to do it—government has no choice but to fill the gap. However, given government’s terrible track record, legislators must be even more willing than usual to (a) experiment with innovative approaches to service delivery and (b) exercise unusually probing oversight.

A good example of this is the operation of commuter railroads. In Massachusetts, both the government (MBTA) and private enterprise (MBCR) have proven ineffective at keeping the trains on time and on budget. Thus even though optimism abounds that a new private carrier, Keolis, will succeed where others have failed, legislators should be on the lookout for waste, fraud, and failure.

In the end, like Welch’s circles, the matrix I’ve outlined won’t hold all functions demanded of government or the private sector. However, it is an effort to get at one of the first principles of American democracy: how to determine the shape and scope of our government.

The Rebirth of the American City and the Future of Intercity Bus Service

Two kinds of people wait in the Port Authority Bus Terminal near Times Square. Some are waiting for buses. Others are waiting for death.

--McCandlish Phillips, New York Times (18 May 1970)

As is my custom on long weekends, I took a bus (this time, Greyhound’s YO! Bus) from New York City to Boston (en route to Essex County). YO! Bus, which serves the Boston-NYC-Philadelphia market, is one of many players in a curbside bus industry that has proliferated in recent years, as “Chinatown” bus operators and international competitors (like the UK’s Megabus) have entered a market previously dominated by Greyhound/Peter Pan.

This growth, which emerged in the late 1990s after decades of declining ridership, corresponded with the rebirth of American cities—not just in the Northeast Corridor, but across the country. That rise continues unabated, with Inter-city bus travel growing by 7.1% in 2011, compared with 1.5% for air and 1.16% for rail, according to DePaul University.

Many cities, including Boston, require bus operators to use indoor terminals. However, New York City’s main terminal, the Port Authority Bus Terminal (PABT) at 42^nd Street and 8^th Avenue—the world’s busiest (225,000 passengers daily)—has no openings, thanks in part to pitiful trans-Hudson train service, which leads the PABT to be the destination for commuter buses from New Jersey. As a result, operators have sought and received approval for pick-up and drop-off sites throughout Manhattan, Brooklyn, and Queens.

This has led to significant community opposition, with neighborhoods fearful of the effects of pickups and dropoffs late into the night—from idling buses and crowded sidewalks, to noisy travelers and reduced parking. Not only does the curbside model have negative effects on communities, it also is less desirable for travelers, who are forced to brave the elements and who would—all things equal—prefer greater multi-modal access near the city core.

In NYC, the solution to this problem is well known—replacement/expansion of the PABT. However, while the Port Authority recently announced an 18-month study of possible expansion, the 2014-2023 capital plan does not include funding for such a project. At a time in which the Port’s balance sheet is saddled with billions in cost-overruns related to the rebuilding of the World Trade Center and the WTC-PATH terminal, where would such funding come from?

One obvious answer would be from the valuable air rights the Port owns atop its Times Square terminal. A plan in 2008 valued these rights and the rents that could be secured in connection with those rights, to be worth about $500 million. Since that time, the price of air rights in the Midtown area has risen further, especially for residential construction, providing a source of private capital that will help reduce the burden on tolls at Port crossings.

Regardless of the funding mechanism, one thing seems certain—the intercity bus market and the demand for space in Midtown Manhattan isn’t gong away anytime soon. With low barriers to entry (in NYC, permits are issued for three years at a cost that varies based on the number of weekly trips made), the market is ripe for more disruption by smaller players. That very prospect has led the American Bus Association, a trade group representing large operators, to call for more regulation of the industry. While all buses should meet basic safety standards, erecting further barriers to protect the position of the larger players is inappropriate and should be resisted by city and state leaders who must recognize the importance of intercity links to economic growth.

Indeed, while low-cost, environmentally-friendly bus service has been revived by the rise of America’s cities, buses also add fuel to that rise—linking campuses and job corridors to create economic growth opportunities at the regional level. Cities and transit agencies like the Port Authority must do their part to embrace this development by investing in bus terminals—which improve modal connectivity and reduce the burden of curbside pickups on communities—and can, if well-designed, become a destination in their own right.

Sochi 2014 and Boston 2024

http://www.bostonglobe.com/magazine/2014/02/02/boston-should-stop-chasing-its-olympic-dreams/iVMbbRfIwUE6vcQxzGCknL/story.html#

On the night of the Opening Ceremonies of the Winter Olympics in Sochi, I want to take a look at Boston’s bid for the 2024 Summer Olympics and push back against some of the claims made by Shira Springer of the Boston Globe.

Springer lays out the same argument made by many observers of the Olympic Games: namely, that they are very expensive and offer too little in terms of long-term economic development.

However, Springer—like others who denigrate the economic effect of the Games—fails to understand that the lasting legacy of well-run Olympics (like London 2012) is not empty stadiums (London’s Olympic Stadium will soon be filled with a team from the Barclay’s Premier League, its aquatics center is now a world-class community facility, and several of its other arenas have been packed up and sent to Rio de Janeiro for use in 2016). Rather, the lasting legacy is the infrastructure—specifically, transportation and housing—that is built for the participants in and spectators of the Games.

Springer notes that London spent $15 billion on the Games. But what if I told you that nearly $12 billion of that sum was spent on transformative, permanent improvements to London’s transit network, including:

·      Four new or renovated subway lines

·      Dedicated express rail connections between Heathrow Airport and Central London

·      High-speed rail links between East London and Continental Europe

·      Dozens of new bike/pedestrian routes (which paved the way for London’s version of the HubWay to take off in 2010)

These investments—which will support London’s economy for generations to come—would not have been made had London not hosted the Games.

In Boston, we look at our rickety old subway system and wonder if we will ever be able to build out a true 21^st century transit network in the Hub. The fact is that plans for subway expansion in Metro-Boston—from the Blue Line to Central Square-Lynn (first discussed in a 1926 report) to the quixotic effort to build a Silver Line subway (first discussed in 1948)– have gone nowhere for 25 years—since the last Red Line stations opened from Harvard Square to Alewife and the Orange Line extended to Forest Hills.

The Olympics would be a catalyst for those investments, as well as improvements at North and South Stations (including the ever-elusive connection between the two hubs), spurred on by the need to move visitors between venues (such as the TD Garden and the Olympic Stadium—which would be perched on the waterfront).

Boston’s Olympic legacy wouldn’t end with transformative transportation projects. Rather, just as London has used the Olympic village to boost affordable housing, so Boston—desperately in need of additional housing stock—would benefit from thousands of units build for the world’s greatest athletes, but intended for Boston’s families.

Lastly, let us not discount the great civic pride that comes with hosting the world for a fortnight. Londoners of all stripes volunteered with spirit to welcome people from all corners of the Globe to their City.

So it would be in Beantown, where baseball’s cathedral would host soccer; the ancient polo fields in my hometown of Hamilton would be the showcase for equestrian (with the Romney’s attendance an essential component); the Charles River, always packed with rowers in October, would host the world’s best sculls; the ancient stone horseshoe of Harvard Stadium would be lit up by world class field hockey; the windy waters of Marblehead as the perfect setting for sailing; the brilliant sand of Singing Beach in Manchester for beach volleyball; and the 26.2 miles from Hopkinton to Copley Square providing the backdrop to the greatest Olympic Marathon of all time.

So here’s to Sochi 2014…and Boston 2024.