First, New Yorkers called us the Second City. Now, we’re “The Second-Rate City.” That’s the title of an article in City Journal, which attempts to put Chicago back in its place by suggesting we give up our goal of becoming a global city and accept our position as capital of the Midwest.
The article, by Urbanophile blogger Aaron M. Renn, argues Chicago “took a turn for the worse” in the 2000s. Of the 15 largest American cities, only Chicago lost population. In fact, we suffered the second-highest population loss of any city, after only (shudder) Detroit. Over 80 percent of the lost residents were black, suggesting the city is becoming “Europeanized,” with the wealthy living at the core, and the poor relegated to the suburbs. Chicagoland grew only 4 percent, “less than half the national average.”
City Journal blames Illinois’s fiscal crisis, which has left the city and the state unable to deal with its pension obligations, for driving business away from Chicago. Because of our enormous deficits, “last year’s income tax hikes are only a taste of what’s to come.”
But author Aaron M. Renn concludes that Chicago’s biggest problem is our overambitious campaign to become a “global city,” a status we aren’t cut out to hold:
Most true global cities are a dominant location of a major industry: finance in New York, entertainment in Los Angeles, government in Washington, and so on. That position lets them harvest outsize tax revenues that can be fed back into sustaining the region. Thus New York uses Wall Street money, perhaps to too great an extent, to pay its bills.
Chicago, however, isn’t the epicenter of any important macro-industry, so it lacks this wealth-generation engine. It has some specialties, such as financial derivatives and the design of supertall skyscrapers, but they’re too small to drive the city. The lack of a calling-card industry that can generate huge returns is perhaps one reason Chicago’s per-capita GDP is so low. It also means that there aren’t many people who have to be in Chicago to do business. Plenty of financiers have to settle in New York, lots of software engineers must move to Silicon Valley, but few people will pay any price or bear any burden for the privilege of doing business in Chicago.
Chicago’s history militates against its transforming itself into a global city on the scale of New York, London, or Hong Kong. Yes, its wealth was built by dominating America’s agro-industrial complex—leading the way in such industries as railroads, meatpacking, lumber processing, and grain processing—but that is long gone, and the high-end services jobs that remain to support those sectors aren’t a replacement. Chicago as a whole is less a global city than the unofficial capital of the Midwest, and its economy may still be more tied to that troubled region than it would like to admit.
When Rahm Emanuel left Washington, D.C., it was to become mayor of a city befitting his status as international power broker. Emanuel last lived here full-time in the 1990s, when Chicago was at its highest point since the Roaring ’20s. Instead, he may be the mayor who has to admit Chicago’s limitations.
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