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GOOD MORNING ON THE RIVER! Serving Antoiitos so Zucchini \(Breakfast. Nachos, Burgers. Chili. Hot Dogs. 7:30 a.m. until Midnight 225-4098 RESTAURANT 511 Rivcrwalk Across from the Kangaroo Court San Antonio, Texas Good books in every field JENKINS PUBLISHING CO. The Pemberton Press John H. Jenkins, Publisher Box 2085 6 Austin 78768 local finance, must be readjusted through conscious reassessments. Such reassessments generally occur only at specific intervals and are politically difficult to accomplish during periods of high inflation. The result is that cities lose purchasing power faster than the rest of society. Atlanta, for example, in a recent two-year period lost 16.6% of the value of its revenue by experiencing an effective property tax rate decline of 14%.” Still another effect of national economic problems for cities is the range of issues that come under the heading of structural changes in the U.S. economy. Structural changes, such as the decline of specific industry sectors, have created patterns of regional advantage and disadvantage, population shifts and industrial migration. The story of population and job loss in central cities is all too familiar. Today’s news carries the story that 137,000 General Motors workers are now “on furlough.” The implications are clear for Detroit, Akron, Toledo, South Bend, and all of those other cities where GM plants are located or where the factories exist that make automobile tires, windshields, ball bearings and engine parts. The conclusion is clear: cities are daily buffeted by economic realities to a degree that the economic assault is the dominant fact of life for city governments. Let us talk about the economic future of the cities in America. There is an immediate temptation to point to the need for a national urban policy. As we review national urban problems, the natural response for one searching for solutions is to look for national solutions. A person such as myself, a Mayor of a growing Southwestern city, observing the current economic circumstances in the nation and in the cities, tries to draw conclusions about a national urban policy. But that is a very difficult thing to do, because the differences across the cities and the regions of this country are great. Yet I do think it is possible to make two points about the relationship between the cities and the nation, perhaps as a basis for national policy. The first is obvious and is often stated: that the health of the cities requires as a precondition a prosperous national economy. The second point is less well understood, but I believe it needs to be developed as part of our basic understanding of the workings of our society: that to attain a prosperous national economy, one that is able to deal with ideals of American society, requires the general health of a balnced system of cities. I see the role of the cities not as incidental beneficiaries or unintended victims of economic trends but instead as fundamental building blocks for the national economy and building blocks for the social ideals of United States society. It is a two-sided coin. Let us examine the two sides of that coin separately. First, the health of the cities requires as a precondition a prosperous national economy. I have already stated some of the elements of my case: When national unemployment is up, it is higher in the cities by as much as 5%. When inflation is high, it affects the package of city expenditures worse. When inflation is up, it outstrips the revenue-producing power of such basic taxes as the property tax. When interest rates are high, cities must pay more for public debt, the need for which cannot be postponed because replacement or expansion of critical public requirements such as sewer systems or water services cannot long be delayed. When recession induces plant closings, they occur first in the cities and often it is the city plants which remain closed even after cyclical recoveries. When the national savings rate declines and capital business reinvestment in modernization is unavailable, it is the productivity of older city-based plants which suffers by comparison with newer facilities. Although these facts tend to be true for cities all across the nation, some people would argue that the health of every city in fact does not depend upon national prosperity; that it is possible to have some, in fact many, city economies remain strong even in a severe national recession by virtue of prosperous regional or local conditions. As evidence, one could cite the fact that Oklahoma City today, to pick but one example of a dynamic Sunbelt city, had an unemployment rate of only 3% through much of 1981 and that about 15% more new jobs were created in the oil business, agriculture, retailing, and real estate. Nearly similar statistics could be cited for Phoenix, Denver, Tampa, Jacksonville, Tulsa, Houston, Dallas, San Diego, San Jose, San Antonio, Austin, or Tucson. And there is frankly a great temptation to cite such success as indication of what is possible and write off the problems of the Northeastern and North Central cities. That temptation has found expression in the implicit thrust of a national commission’s recommendation that citizens from depressed areas should “vote with their feet” and pursue opportunities elsewhere. Such feelings are reinforced by Sunbelt convictions that in previous periods of our national history, the regions that are today’s losers the depressed cities were heavy-handed oppressors of the rest of the nation. There is a sense that this is a period of reckoning for the Eastern bankers, the railroad barons, the steel producers, and the so-called Eastern establishment politicians who held such a stranglehold on the machinery of production, the raw materials, and the capital so badly needed to fully develop the South, the West, and the Southwest in earlier periods of our history. And if calling these feelings “revenge” is too strong, then there is at least a sense that much of the North’s problems are of its own making, the products of profligate spending by big city political organizations, of out-of-control labor unions, or of overpromising that assumes dimensions of a political-economic ethic. THE TEXAS OBSERVER 15