***
The Two Tomorrows report is unique in the recent Cleveland economic development literature, as far as I know, in one key respect: It has the decency to acknowledge systemic racial exclusion as a defining characteristic of the region's economic landscape. Racial exclusion has been as dominant a theme as any in Cleveland’s 20th century development, and while ignoring it would be in keeping with other local delusions, doing so is an insult to the communities who have been ravaged by the brutally effective policies designed to disempower and disenfranchise them.
Circumscribed around the report’s suggestions for regional priorities – namely: Job Creation, Job Preparation and Job Access – is an insistence that racial equity be a central component in all development discussions moving forward. That's critically important, and I wanted to start there.
If you’ve read the report, you might remember that it opens with a quote from James Baldwin, who says: “Not everything that is faced can be changed. But nothing can be changed until it is faced.”
One reason I’m here today is to try to determine whether we’re actually facing what we think we’re facing – that is, what’s been suddenly pegged as the region’s dire economic performance – or whether, as many of you have complained, the past few months have merely been an exercise, a chit-chat session of the sort that mushrooms up around here every decade or so.
It’s worth pointing out that among the more persistent observations about Cleveland and its leaders is that they’re actually very good at talking about our problems — they love nothing more than City Club forums, "listening tours," summits — but much less good at producing and implementing solutions. That’s why these conversations always sound exactly the same.
(I don’t think that’s accidental, by the way, and it goes back to the Baldwin quote. I think we’re kind of pathologically unable to face the real root causes of the region's problems, which I'll get to.)
***
It seems pertinent to ask why we’re having this conversation now.
Is it all because of Jon Pinney, the local lawyer who got the ball rolling with his now famous June 8 City Club talk? That's certainly possible, but the statistics he cited – the employment numbers reported by Forbes and the declining population numbers estimated by the U.S Census Bureau – have been around for years. They are well-known to anyone who has bothered to look, as are a slew of other ghastly statistics that paint a grimmer picture of the region’s economy and of residents' quality of life.
Yet Pinney's speech was hailed, in some quarters, as a bold and unprecedented confrontation. While we might ask what or whom he was confronting, it seems clear that he was standing up to something. After all, he said he’d received "thousands of emails" after an op-ed he'd written in Smart Business magazine, plus phone calls before his speech from leaders who asked him to “tone down his rhetoric." During introductory remarks, and again in a follow-up op-ed, he claimed that preparing for and presenting his speech was "one of the most challenging professional experiences" of his life; indeed the “hardest thing [he’d] ever done.”
That’s not to knock Pinney. I’m familiar with the antagonisms of local leadership and can imagine the pressure and censure he may well have endured. But it should give us a clue about the power dynamics in Cleveland, and the intolerance for, and suppression of, what are perceived to be dangerous ideas.
There's a natural question to ask, then: What was so dangerous about Pinney’s talk? What about his rhetoric required "toning down"? What did he do, even?
Well, he stood before a room full of corporate and nonprofit executives – roughly speaking, a jury of his peers — and cited publicly available sources about the region's economic rankings. Furthermore, he said that Cleveland leaders didn’t appear to like each other all that much, and that they’d better start collaborating if they wanted to get ahead. His catchy quotable was that Cleveland had what he called an “egosystem,” not an ecosystem, and that greater alignment was necessary among economic development agencies.
Even if he hadn’t called on exclusively white males to step up and lead at the end of his speech, I’d argue that his remarks were not “facing” our underlying problems, at least not in James Baldwin’s sense.
Because, crudely speaking, all Pinney wanted to do was move up the rankings. He was sick of being “dead last” – that was the name of his speech – and wanted to inspire a new cohort of emerging leaders to take charge and get strategic to help grow the population and animate minds and hearts with grand new "moonshots," and so forth. (There’s no time to go into it, but feel free to check out my essay on the failed Amazon bid and what I call the “Superlative Imperative” of Cleveland elites, which is related). But he was just peeping through a curtain of propaganda, not tearing it down.
Not for nothing has Pinney now jumped headlong into Bernie Moreno’s Blockland Initiative, where his task is assembling a “capital stack” of incentives and tax credits to make building an innovation center — what he calls "the world's largest and most advanced technology and entrepreneurial ecosystem hub" — as attractive as possible for potential investors. It's called "City Block" in the Blockland lingo.
Meanwhile, he continues to get flak for the dangerous content of his speech. Cleveland City Council President Kevin Kelley, in a tweet last week, shared a report from the Federal Bureau of Economic Analysis which found that Cleveland's regional GDP grew by 2.9 percent in 2017, slightly more than the economies of both Metro Columbus and Metro Cincinnati.
CLE's $139B economy grew faster and is bigger than CIN or COL; it's the 28th largest economy in the nation; it has grown by 21% since 2012. I guess the narrative of "Dead Last" is dead wrong. @CleCityCouncil @TheCityClub https://t.co/I7LNPylqW3
— Kevin Kelley (@kevinkelleyCLE) September 20, 2018
"I guess the narrative of 'dead last' is 'dead wrong,'" he said, if you didn't catch it.
Kelley is a politician and, like most of his colleagues, traffics in this sort of propaganda — for all I know, he's buddies with Pinney and was just yanking his chain — but he failed to mention that the report didn’t disaggregate for specific cities, nor did it say anything about economic inequality, which in Cleveland is vast and widening and is especially ugly if you take racial disparities into account.
The point is, the economy may technically be growing when the rich get richer, but that’s not how the vast majority of us interpret economic success or stability. That's why Trump sounds like such a lunatic every time he celebrates the soaring stock market. (If you're interested in this topic, check out this article by Matthew Desmond, who wrote Evicted, which was published earlier this month in the New York Times.)
There’s a relevant quote in the Two Tomorrows report, too, from economist Joseph Stiglitz, who says that “the only sustainable prosperity is shared prosperity.” And in Cleveland, to the extent that prosperity exists, it’s not shared. Not by a long shot.
***
Inequality is obviously an enormous problem, and economic development leaders are by now savvy enough to pay lip service to the idea of equity planning (a model with local roots.)
But the biggest problem that has emerged from conversations about the Two Tomorrows report is that Cleveland — I hate to be so blunt — has really shitty leaders. At the presentation of the report that I attended last month, attendees were asked to identify and vote on Cleveland’s top challenges, "challenges" being the blanket euphemism for anything bad. Eight of the 11 most popular answers had to do with poor leadership.
Cleveland leaders are “old and not smart,” said one person. Cleveland is an old boys club, said another. Leaders are out of touch, apathetic, intolerant of young voices. They’re not inclusive. They're not collaborative. They're an “insiders club."
Okay, so, the question is: Who are these guys? Who are all these shitty, intolerant, non-inclusive leaders? Where can we direct our frustration? Who can we vote out? (That's always the impulse, in my experience: Who can we vote out?)
One obvious candidate would appear to be Frank Jackson, Cleveland’s longest serving and least charismatic Mayor of all-time. He’s an easy target because he seems to represent the feeble, out-of-touch leadership culture that folks resent.
And yet, Frank Jackson is just a puppet.
My big-picture analysis of the Cleveland economic landscape is more or less the same as American Philosopher John Dewey’s analysis of the United States in 1931, during the Great Depression.
“Government,” he said “is the shadow cast on society by big business.” He argued that social change could only be brought about by changing the fundamental structure of the political order. You couldn't just substitute slightly younger and more photogenic politicians, for example, and expect to get new results.
On a related (and much more recent) note, Akron’s Chief of Staff James Hardy said at an event earlier this month that, “We're not going to solve economic despair with some sort of innovation that comes out of anywhere but the systems that created it. We have to change the systems, radically, if we want to see innovation.”
Okay! Wonderful! What does it mean, though, that systems need radical restructuring? Which systems? And how? All this sure sounds cool and progressive, but it's also difficult to visualize and articulate.
Here's one example. In 2017, Frank Jackson coasted to his fourth mayoral term. Never mind the quality of the opposition, I think he pounded the pavement for a total of maybe 30 minutes. He didn’t have to campaign, at all, because he raised orders of magnitude more money than all of his challengers combined. He actually raised more in a single evening than all of his primary challengers had raised to that point, (at the infamous Fat Cat Festival in Gates Mills).
We should be familiar with this dynamic — the scourge of money in politics! — and we should recognize that it creates a situation, as Sen. Bernie Sanders described when visiting Cleveland last year, in which politicians effectively become employees of their donors.
So then we have to ask, who are the employers in Cleveland? Who are the bosses? Who's bankrolling the top lawmakers and officials like Frank Jackson? Well, as you can imagine, a whole lot of powerful people. But chief among them are real estate developers, corporate lawyers and financial executives.
They are the ones calling the shots. They are the men (virtually all men) behind the propaganda curtain. They are the intolerant insiders, the non-collaborative old boys who command the region's top boards — check out the websites of the big local institutions; the boards are all interchangeable — and they are the ones who must be challenged and conquered if economic development organizations, including the Fund for our Economic Future, are serious about advancing equity.
Just take a look around to see what happens when these guys have free reign. They purchase candidates – and fund nonprofits and think tanks, by the way – who are pleased to do their bidding, which means maintaining a system in which they retain power and maximize profits, primarily through tax incentives and public subsidies and the like. It's Oligarchy 101.
***
The situation described above makes attempts to pursue "equitable development" nearly impossible in Cleveland, however well-intentioned.
The Two Tomorrows prescribes, in its four-part formula for success, “strong local strategies to advance economic growth with equitable access to opportunity.” The first three areas it suggests tackling with this approach are economic policy, transportation policy and land use policy.
There’s really no time to discuss these in depth, but I want to illustrate how hard it is, in practice, to enact equitable policies in these areas. In virtually every case, full-throated attacks from the mainstream media, plus flanking maneuvers from the business community, obliterate them out of the gate.
Let's just do one [example] for each:
In terms of economic policy, what's something sensible that would really do wonders for the poorest among us? What's a policy that would really improve economic equity, especially if we believe, as Two Tomorrows does, that economic bifurcation (which is most dramatic along racial lines) is a huge problem in the region? Well, how about raising the minimum wage?
Yikes! Do you remember what happened when a $15/hour minimum wage was proposed in Cleveland? You'd be hard-pressed to find more vicious editorials from the Plain Dealer. Take a look at how it was covered, how the SEIU and their supporters were vilified. The business community rallied the troops and effectively painted a doomsday scenario in which every McDonald's in the city limits would flee to Euclid and Middleburg Heights if the legislation passed. They enlisted the Salzmans, of Dave's Supermarkets, to write mournful op-eds and gain popular sympathy. Kevin Kelley allied with Republican lobbyists in Columbus to ensure that Cleveland would have no chance of passing it, and City Council didn't raise much of a fuss. Not a single councilperson supported the legislation as proposed. Even Jeff Johnson, labor lover and resident radical, only went so far as supporting a $12/hour wage with incremental increases. It didn't stand a chance.
Well, okay, so that's out.
What about equitable transportation policy? What's a policy that would help out poor people, who ride public transit at vastly higher rates than wealthy leaders who, virtually without exception, live in the suburbs? How about funding RTA?
Well, let's take a look at what happened when transit activists attempted to get a levy on the ballot just this summer. It was the same story: pious editorials in the paper — the PD wouldn't support a levy, it said, because of organizational disarray. RTA had to get its own house in order.
Was there any support from local employers, many of whom have been whining for more frequent, reliable transit so that their minimum-wage employees can get to work on time? Of course not! RTA's own board had only one member to support the levy. It was wild. Predictably, voices on Twitter chimed in to note that Cuyahoga County was already one of the most overtaxed counties in the state of Ohio. And that's true, for perfectly obvious reasons. Just look at the parking tax, which would be the most sensible mechanism for funding transit. It was even suggested in a report this month by the Greater Ohio Policy Center. Unfortunately, Cuyahoga County has already levied the maximum 8-percent parking tax, (the only county in Ohio to do so.) That tax, established in 1996, doesn't pay for public transit, though. It pays for the construction and maintenance of First Energy Stadium.
Darn!
Well, okay, so what about land use policy? What would be a thoughtful thing to pursue in order to increase equity in that area?
How about modifying Cleveland's blanket 15-year tax abatement, an incentive for developers which anyone who lives in Tremont, Ohio City or Detroit-Shoreway can tell you is no longer necessary there, seeing as it's no longer doing what it was designed to do: spur investment in areas that wouldn't otherwise get it. An equitable approach would be to target the abatements much more selectively, to try to generate investment in areas that actually need them.
As it happens, Cleveland City Council had an opportunity to do just that last summer, and, surprise, surprise, they didn't. So the tax-free $500,000 condos — a direct handout to developers, who are able to jack up the sales price, knowing that purchasers are more than happy to pay a premium since they won't be paying taxes — will continue, and longtime homeowners in hot neighborhoods will shoulder an increasing percentage of the tax burden. (Cleveland.com's Rich Exner wrote about it this week.) Fortunately, councilman Kerry McCormack has said that the program could do with some tweaking, so hopefully he'll raise his voice the next time around.
Do you see what I'm talking about?
***
All this is to say that equity is met with extraordinary resistance in Cleveland. And it brings me to my final point: the Opportunity Zones, the financial incentive for the wealthy du jour.
This is a federal incentive that will allow 1-percenters to postpone or forego capital gains taxes by investing in high-poverty areas like Ohio City and Tremont.
I'm being facetious, but it is troublesome to me that some of Cleveland's most prosperous areas, including downtown and University Circle, were included among the distressed census tracts selected for the incentive. Wouldn't the nomination process have been a perfect time to advance a more equitable agenda? In any case, Brad Whitehead and the Fund have been explicit that they want to ensure "true equitable investment," by directing money toward Opportunity Zones that aren't already prosperous.
That’s a noble goal, and it will be important for people like me to report on whether or not it's achieved. My point is only that it will be a difficult task. Given local custom, it is only with enormous and sustained interventions that investors will do anything other than flock to the highest and most certain returns.
But it can be done.
The good news is, opposition works. The grassroots opposition to the Q Deal and Public Square last year was exactly the sort of organizing energy that’s required to stand up to local established power. The Public Square opposition was successful. The Q Deal opposition was successful up until its 11th hour implosion, and while there’s a tendency to be crushed by that defeat – with very good reason – the opposition terrified local elites. And it demonstrates that together, if we've got the will and the stamina, we can build a brighter and more equitable tomorrow.
