Ideological Hurricane

Last September's tragedy in New Orleans revealed, in the starkest manner, the soft underbelly of America's cities. After all the 1990s rhetoric insisting that "Cities are back!" we got a glimpse behind the facades of a major urban center and tourist mecca which revealed many utterly dependent and disorganized residents, looking more like Third Worlders than denizens of a modern metropolis. In the process, the urban liberalism that has dominated city administration for the last generation was unmasked.

New Orleans as paragon of a hollowed-out city

To be sure, New Orleans is a unique case. Built below sea level, it has one of the most heavily African-American populations in the nation. It has long been among America's poorest and most crime-ridden cities. Its economy has been in a not-so-genteel decline for generations. And New Orleans has a long history of inept and corrupt governance.

Despite having a huge port, the industrial, commercial, and professional base in New Orleans is far smaller than normal for a city of its size. The main local business is now tourism, which pays low wages -- historically almost 50 percent below the national average. Before Katrina ever whirled, roughly one in four New Orleanians was poor, and 100,000 locals lived in "high poverty zones" where more than 40 percent of residents were poor.

"We are the bottom for poverty" sums up Sonya Heisser, a graduate student in social work at Southern University, and herself a product of New Orleans's hardscrabble streets. "People work in low wage industries. We have a poor school system. And the politicians keep getting indicted." Approximately 10,000 of the 60,000 students in New Orleans public schools were suspended last year. Only half of high schoolers graduate in four years.

As Heisser suggests, New Orleans and the state of Louisiana have much to answer for in their inefficient and often dishonest governments. Rotten administration is why the city and state had no real plan to evacuate the huge poverty population, though 30 percent do not own cars. It may also turn out to have something to do with the failures of the levee system. A sense of fatalism, rare in America, overlays the entire state.

In retrospect, the chaos that followed Katrina should have taken no one by surprise. The city's police force has long been considered among the worst in the nation, with two former members sitting on death row, and a low rate of convictions for serious crime. At a time when urban America's overall crime rate has been dropping, homicides in New Orleans, after a period of relative calm, have been back on the upswing. Long before the flood, a person living in New Orleans had a ten times higher chance of being murdered than the average American.

Few other cities in America would have reached New Orleans-level chaos after a Katrina-like catastrophe. Nonetheless, the problems revealed in the Crescent City also exist (at a slightly lower level) in nearly every other large city today. And not only in this country, but also in Europe, as this winter's French riots have made plain.

Though we have tried to forget it in recent years, all of the liberal industrial nations continue to struggle with a serious underclass problem. From America's violent ghettos to the hopeless banlieues of Paris and the bleak council estates of Britain, an urban culture of economic and cultural detachment continues to spew forth a subpopulation of alienated, angry, and unproductive citizens.

America is different

In many important ways, the problems of America's urban underclass are radically different from those of their European counterparts. In this country, the deepest and most intractable problems are not in cities with heavy immigrant populations (as in Europe) but rather in places like New Orleans that are dominated by native-born African Americans. Most of the cities with the highest concentrations of poverty in America -- New Orleans, Louisville, Atlanta, Cleveland, Philadelphia -- are predominantly black cities.

These are also cities that most immigrants skip over. Only 5 percent of New Orleans residents were born outside the country -- compared to 28 percent in Houston, 40 percent in Los Angeles, and 36 percent in New York City. This decade, immigrants to the U.S. are headed to cities like Phoenix, Houston, and Orlando that have burgeoning economies. Immigrants who do settle in heavily black metro areas generally move outside city limits, to places like Northern Virginia, Baltimore County, or Kenner (outside of New Orleans).

More important, immigrant poverty -- in places from Fresno, California to Miami -- tends to be different in kind from that of our native born. Latino immigrants, who make up the vast majority of America's poor newcomers, have tended to have above average rates of labor participation. They are working poor, and many supplement their low official incomes with money earned "off the books." Our immigrants also tend to start businesses at a rapid rate -- the percentage of Latino self employment is twice the rate of native-born African Americans, and the ranks of Latino-owned businesses are growing faster than white-owned businesses. Many arrivals from Third World regions like the Middle East, south and east Asia, and the former Soviet bloc start businesses at high rates once in the U.S., in some cases passing those of native-born whites.

Clearly race is no longer a dominant force behind economic success. The per capita income of African immigrants ($20,100) sharply outranked that of Asian immigrants ($16,700) or Central-American immigrants ($9,400) by the late 1990s. African immigrants also earn much more than native-born Americans ($14,400 per capita).

Nothing illustrates the difference between the American and European underclass better than the position of Muslim immigrants. In the United States, Muslims are among the most entrepreneurial and well-educated groups, with roughly 60 percent college educated and two thirds earning over $50,000 per year.

Within one generation -- at most two -- the vast majority of all U.S. immigrants have moved solidly into the middle class. This is true for all races, religions, and groups. Most of our new arrivals already live in suburbs, the bastions of America's middle class.

A matter of attitude

The critical factor separating most U.S. immigrants from our underclass is this: Attitude matters. Most newcomers to America see this not as a land of oppressors (the sore exceptions tend to gravitate toward journalism, politics, or academia, so we sometimes get a skewed impression), but rather as a place of opportunity and fundamental fairness. This often contrasts mightily with conditions in the immigrants' home countries. In many of those places, connections and ethnic privilege are essential to getting anything done. In Nigeria, notes U.S. immigrant/entrepreneur Ibim Bobmanuel, the key issue is "who you know." Land is expensive and controlled by powerful families.

On the other hand, in Houston, where he immigrated in 1984, Bobmanuel was able to start a dry cleaning business in a strip mall with "about five minutes of training." In two years he sold that business and got a license to teach special education at a public school. On the side, he started a health care business. He now employs 15 home-assistance workers, and, from an office in suburban Fort Bend, runs a trucking operation back in Nigeria as well. "Africans come here because there are far fewer barriers," says the jet-black businessman.

Recent immigrants like Bobmanuel and their children now amount to almost 60 million Americans, the largest number in our nation's history, and roughly one fifth of our total population. Some of this large group will inevitably fall into our underclass, as will millions of whites. And certainly the persistence of Latino second- and third-generation gang members in places like Los Angeles confirms that the integration of immigrants into the productive part of American society has been far from perfect. But the overwhelming trend in this country is for new people and new races to be folded into an ever-shifting and ever-increasing American mainstream.

Enmeshed in a poverty culture

On the other side of the spectrum lies the problem of isolated, immobile African-American remnants mired in urban poverty. Along with Native Americans in some rural reservations, these pose today's greatest challenge to our nation's ability to make all citizens productive. On the surface, inner-city blacks should be easier to integrate than most immigrants, since they are native English speakers, long resident in the country, and familiar with American values. To be sure, most black Americans have long since escaped ghetto life. Increasingly, like immigrants, many now live in the suburbs, with middle-class incomes. Amidst the strong economic performance of the last 25 years, impressive numbers of black Americans have moved measurably up the socio-economic ladder.

Yet too many, in too many places, remain enmeshed in a culture of poverty and social dysfunction. History plays a role -- African Americans, like Native Americans, endured long mistreatment. Much of our current crisis, however, is of much more recent vintage than can be explained by the deforming influence of slavery and discrimination.

In the late nineteenth and early twentieth centuries, African Americans developed remarkable institutions -- religious, educational, economic -- that helped them cope with the pains of segregation. They did not manage to achieve equality, but had a sense of self-sufficiency that made for slow, but steady, gains. Much has been made of black churches and schools, but less appreciated are the institutions of commerce (hotels, insurance companies, banks, cosmetic companies, etc.) that once allowed African Americans ownership, employment, and opportunities to hone their professional skills. These businesses grew up in the heart of black America, often just around the corner from established, larger, white counterpart businesses.

The onset of integration in the 1960s devastated many of these firms. White-owned institutions began to market directly to black neighborhoods. African Americans became, en masse, consumers and employees of other firms. A large and growing group managed to integrate into the mainstream economy. Many integrated socially into middle-class America as well.

Left behind, however, was an underclass of non-working or marginally employed blacks. The erosion of low-skilled manufacturing and warehousing jobs hurt, and places hit hardest by the restructuring of the economy -- industrial cities such as Detroit, Cleveland, Chicago, Brooklyn, and Philadelphia -- soon developed the largest underclass populations. New Orleans, the long-term industrial and trade center of the Gulf, suffered much the same fate as these northern cities.

Like most cities, New Orleans sprang up for commercial reasons. French settlers founded the city in 1718 because it was situated at the mouth of the Mississippi, the most critical waterway in North America. Their new port created an industrial base that employed many working-class people, eventually including African Americans who migrated from the rural Mississippi delta after slave plantations and then sharecropping in that region faded. The development of this port complex, and the related energy industry, provided opportunities that raised poor Louisianians of both races from poverty.

But during the 1960s, the push for economic growth that created an upwardly mobile working class was replaced -- in New Orleans as well as most other cities -- by a new paradigm that emphasized politics. Political agitations promoted various forms of racial redress, and the rights of people to receive government welfare payments. By the late 1970s, African Americans in many American cities had gained more titular power than they'd ever dreamed of, including the mayoralty of New Orleans.

Urban liberalism fails the poor

The new political gains of black Americans were widely regarded as a major step toward an improved social status. This coincided with the rise of a new form of urban boosterism -- which showcased downtown renewal districts and insisted that the dramatic decline of city quality of life during the 1960s and 1970s had been reversed in the 1980s and 1990s. Urban elites, including in New Orleans, burbled about the vigor of their cities. Right through last year's Gallup poll, leaders and residents of the Crescent City had (along with San Francisco) one of the highest levels of municipal self-esteem in the country. That now appears sadly delusional.

The truth is that, rather than improving conditions for average residents of their cities, many urban politicians and interest groups have promoted policies that actually exacerbated a metastasizing underclass. Urban liberals tend to blame a shrivelling of Great Society programs for problems in cities. Observers such as former Houston mayor Bob Lanier have suggested, however, that the Great Society impulse itself is what most damaged many cities -- by stressing welfare payments and income redistribution, ethnic grievance, and lax policies on issues like crime and homelessness, instead of the creation of a stronger economy.

This modern liberalism veered far from the traditional progressive visions of politicians like Theodore Roosevelt and Fiorello LaGuardia. Those leaders believed in the basics: building up the economic infrastructure that government has long been responsible for (like ports and transportation), efficient and honest provision of services like education and policing, and mainstream, even conservative, social policies. Today, only a handful of mayors like Chicago's Richard Daley, Jr., Charleston's Joseph Riley, and Houston's Bill White still stick to this "back to basics" focus. Most other urban leaders have turned to more ephemeral issues, less mainstream values, and economic policies that largely surrender to public worker unions, spiced with an emphasis on cultivating arts, entertainment and pro sports, tourism, and show-projects.

Certainly New Orleans was following a very conventional program of urban liberalism. Local leaders had become convinced that becoming a "port of cool" was the ticket to success. Never mind the grubby fiscal and regulatory basics of encouraging business activity. Instead, city and state leaders adopted Richard Florida's trendy "creative class" theory, and held a conference just a month before Katrina promoting the idea that a cultural strategy of fostering edgy arts and boutique entertainment districts was a promising way to bring in high-end industry. Over the previous decade, city leaders had already transformed the once-bustling warehouse district into a tourist zone. Before the hurricane hit, state and city officials were looking to expand the now-infamous convention center at a price tag of some $450 million.

Amidst the focus on les bons temps, high-paying core industries like the port and energy production were left to decamp to places like the less lovely but far more business-friendly and efficient city of Houston. (See sidebar on page 26.) This is a tragic story which played out in similar ways in many city halls.

The result of these unfortunate political decisions was to leave many urban cores with nothing but some often largely vacant office towers, Potemkin tourist districts, lousy public schools, ineffective police departments, and blocks of decrepit neighborhoods where residents are more dependent on government checks or jobs, or criminal activity, than on paid employment. The results of this decoupling of cities from the global economy has been all too evident. Wealthy elites who own or patronize restaurants, high-end hotels, loft developments, and cultural institutions have done fine. Younger, single, and gay residents of cities have enjoyed themselves. But for working- and middle-class families with children, cities have become hostile environments.

Lower-income blacks have been particularly hard hit. The best local job option may be a low-wage position in a restaurant or hotel with few prospects for advancement. For many, it has become easier to retreat to the underground or mailbox economy, to explain away failure than to accept responsibility.

Saddest of all, these attitudes are now transmitted intergenerationally. Nationwide, seven out of ten black children are now born to an unmarried mother. In inner cities like New Orleans, nearly all black births now come out of wedlock. "There is a lack of parent involvement," says Chrystal Walker, a former New Orleans teacher I interviewed in Houston. "I had a lot of students who didn't do any assignments. Their parents never showed up except when they were suspended. They didn't want them."

Real reform, or averted eyes?

Social workers like New Orleanian Sonya Heisser point out that even the poorest individuals still have control of their own lives. She tells her clients, "I don't have to go the fast way. I don't have to sell drugs. I make my own changes. Most of this is about choices -- we all make choices."

But while underclass behaviors eventually boil down to personal decisions, society and government set the table with the ground rules they establish in cities. Today, most central cities feature horrific educational deficiences, crumbling infrastructure, and stultifying regulations that drive commerce ever more into the suburban periphery. Yet most city leaders -- not to mention productive citizens in the rest of the nation -- avert their eyes from these problems until a trauma like Katrina forces the products of our urban maladministration into view. Rather than re-examine their bankrupt social and economic premises, urban elites prefer to channel money into sports stadia and convention centers, hip lofts and restaurants, hoping somehow this will suck talent and wealth into their cities. As if today's urban underclass will just fade away, and leave the cool hipsters unbothered to enjoy their entertainment districts.

This collapse of responsibility and discipline goes against the entire grain of urban history. From republican Rome to the golden ages of Venice, Amsterdam, London, and New York, cities have flourished most when they have served as places of aspiration and upward mobility, of hard work and individual accountability. By becoming mass dispensers of welfare for the unskilled, playpens for the well-heeled and fashionable, easy marks for special interests, and bunglers at maintaining public safety and dispensing efficient services to residents and businesses, many cities have become useless to the middle class, and toxic for the disorganized poor. Today's liberal urban leadership across America needs to see the New Orleans storm not as just a tragedy, but also as a dispeller of illusions, a revealer of awful truths, and a potential harbinger of things to come in their own backyards.

Look beyond the tourist districts. Few contemporary cities are actually healthy in terms of job growth or middle-class amenities. Most are in the grips of moral and economic crisis.

If we are lucky, the flood waters of Katrina will wash away some of the '60s-era illusions that fed today's dysfunction. Honest observers will recognize that this natural disaster, which hit the nation so hard, was set up by the man-made disaster of a counterproductive welfare state.

More likely, many metro elites will continue to resist dramatic reforms like reining in civil service bloat, providing tax and regulatory relief for small businesses, or promoting family and moral revival. Even as they invoke the great mayors of the past, they will eschew a renewed focus on true progressive values of better and more accountable schools, good roads, and jobs that provide upward mobility.

Instead, our urban leaders and their enablers -- from rich developers to social agitators -- will insist their old strategies are working. The media will likely echo their press releases. This will work only until our cities crumble under pressure, as in New Orleans, explode from within, like Paris, or simply become irrelevant anachronisms at the margins of modern society.

A Tale of Two Cities

Houston and New Orleans are places united by geography, climate, and history -- and divided on virtually everything else. The two cities represent contrasting ways of coping with the urban experience.

New Orleans was for much of its history the Queen City of the Gulf of Mexico, the cultural, economic, and commercial center of the Caribbean basin. Until well into the twentieth century, the city was an entrepreneurial cauldron, for blacks as well as whites, providing a greater degree of freedom and opportunity than virtually anywhere in the South.

Houston, in comparison, is a newcomer. In 1920, its population was barely a third of New Orleans's, and its role in U.S. commerce was insubstantial. Since that time, the two cities have been heading in opposite directions. New Orleans has been living off its history, while Houston tore earnestly into relentless self-improvement. Its leaders dredged its harbor, improved drainage, and constructed state of the art industrial facilities that made it the great Gulf Coast port. Houston grabbed leadership of the world's energy industry, and quietly built the most impressive medical complex in the world. With a gritty efficiency, the city transformed itself into a major global center.

Attention to the economic fundamentals has been critical to the city's rise. Houston's government has been seen as favoring the business community over all other interests, including its poor and minority populations. Over time, however, that has allowed the city to dramatically raise the wealth and quality of life of all its citizens.

In backscratching New Orleans, on the other hand, chronic political "favor-asking" and corruption turned off entrepreneurs and anesthetized the local economy. David Wolff, who runs a real estate business in Houston, recalls that his attempts to do business in New Orleans tended to end in shakedowns. "In New Orleans they say it's all about the thin hogs trying to push out the fat hogs. That's the whole attitude down there. I didn't want any part of it," says Wolff, now one of Houston's largest landowners.

Houston was fortunate to have one of America's best mayors -- Bob Lanier -- for much of the 1990s. A former developer and lifelong Democrat, Lanier attended to all the business-like details that New Orleans's politicians eshewed, such as improving levees, filling potholes, and streamlining regulations. Houston has had its own ample experience with natural disasters, but has coped much more efficiently.

Under very different management, Houston long ago surpassed New Orleans, and now boasts a population more than three times larger, and a vastly more dynamic economy. During the 1990s, the Texas city grew almost six times faster than greater New Orleans. It flourished as a major destination for immigrants, particularly from Latin America.

One clear area of success has been race. Like New Orleans, Houston was a Southern city with a history of racial discrimination. But in the early 1960s the city decided to desegregate. It did so not as much for moral reasons as because it was perceived to be bad for business.

That phrase, "bad for business," is close to a curse in Houston. Business drive and the search for a better economic future has sustained this city through boom times and crashes, notably the disastrous energy bust of the 1980s. Because of the economic flexibility of the locals, even that disaster was turned into a boon. Collapsed property prices and lots of available space lured hundreds of thousands of new immigrants to the city, sparking a durable new revival, recalls Houston architect Tim Cisnero, whose clients include Mexican, African, Chinese, and Indian entrepreneurs.

"We're becoming a new city with new opportunities," he states, "all changed by capitalism." Houston's opportunism is sometimes portrayed as callous and uncaring. Indeed as Katrina refugees flooded into Houston from Louisiana, the New York Times published a withering story about how some of the Texas city's entrepreneurs were profiting from the New Orleans tragedy. What the national media missed, however, may well be Houston's finest hour -- and evidence of what a great civic culture can accomplish. In the days after the inundation of New Orleans, Houston's politicians, businessmen, and numerous non-profits prepared to accommodate a flood of their own: around 200,000 displaced people from southern Louisiana.

Most of these evacuees were non-white, many were poor. All instantly needed housing, jobs, school slots, and accomodations of various sorts. And these New Orleanians were greeted by Houstonians not with hostility, but with support and compassion. According to Davis Henderson, CEO of the Greater Houston Area Chapter of the American Red Cross, the response -- including 13,000 spontaneous volunteers -- was unprecedented.

"Who else could have adopted another city like we adopted New Orleans?" he asks. Henderson credits the response largely to the fundamental optimism and openness of Houston's business and religious communities. Other cities would have seen the newcomers as a threat. Most Houstonians felt they could absorb them -- and were willing to be "changed forever" in the process, "and be better for it."

Perhaps the most remarkable thing about Houston's response was its ecumenical effort. The emergency feeding of refugees was spearheaded largely from the religious grassroots by people like Ed Young, pastor of Houston's 41,000-member Second Baptist Church. Coordinating with other faith congregations, Young helped feed some 30,000 impoverished refugees.

"We sent out a clarion call and people responded," Young reports. "We were organized. We're geared to respond easily. Baptists worked with Muslims and Catholics in that first week after Katrina -- we had a pretty ecumenical group," he recalls in an interview at his vast church on the outskirts of the city. "It was maybe not a miracle, but it was supernatural." Houston churches, businesses, and non-profits are now transitioning to the long-term task of accommodating the Louisiana evacuees -- finding permanent homes, jobs, schools, and a restored sense of community for perhaps 150,000 outsiders.

New Orleans evacuees have been plainly surprised by their welcome in the Texas city, which is why so many are expected to stay. A group of New Orleans social work students now finishing their graduate degrees at the University of Houston told me that the key attraction to Houston can be summed up in one word: opportunity.

"This is a place where people go to get ahead," notes Chrystal Walker, a native New Orleanian and former student at predominately black Southern University. "New Orleans will always be my first love. But there are better opportunities here for my kids."