The untapped wealth of American cities

The untapped wealth of American cities

The untapped wealth of American cities

In Copenhagen, the government knows how to leverage public assets like harbors. (Photo credit: CityLab / Reuters)

“Compared to counterparts overseas, cities in the U.S. are terrible at managing their public assets,” write Bruce Katz and Jeremy Nowak for CityLab. “Americans who travel abroad sometimes wonder why many of our airports are lacking in comparison to the best international airports. Or they want to know why other nations seem to do a better job with public transportation and the management of other public assets, from ports to parks. The answers we are tempted to give are that we do not invest as heavily in public infrastructure as many other nations and that a market-oriented American ethos with an entrepreneurial culture prefers private solutions (cars versus trains) to public ones. These answers are certainly part of the story.”

“But there’s another answer: Compared to many other nations, in the United States government has more direct control of public assets such as airports, convention centers, and transport, water and sewer systems (just to name a few). And the government does not, for the most part, manage them well, failing to leverage the market potential and value of the assets they own. Far from being broke, many cities and counties have enormous untapped wealth, which could be used to finance not only infrastructure but investments in children and other critical needs.”

“In the U.S., management of public assets is generally presented in simple and distorted ways. The public ownership status quo (identified generally with the political left) is based on support for the extensive role of the public sector, including an assumption that government management of publicly funded goods is sacrosanct. This perspective also fits the self-interest of politicians who, once elected, become gatekeepers for public goods.”

“A privatization perspective (identified with the political right) holds that government should only own and manage what is necessary to collective well-being and security and, in addition, cannot be operated as a private concern. The assumption that profit-maximization will always result in better social outcomes or that full community access can be assured without any public-purpose guardrails or regulation is where the fallacy of the right matches that of the left. The left fetishizes government; the right fetishizes markets.”

“The battle between these two sides poses a false choice between management mediocrity and the loss of ownership rights. The end result: political partisanship and dysfunction. If you suggest to those on the left that public assets are better managed through private sector principles and incentives, you are accused of neoliberal apostasy. Those on the right, meanwhile, will dismiss you as a hopeless socialist if you venture that the public has a significant economic development role that can be exercised through assets it owns.”

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