Trenton Makes, the World Takes

Tyler Cowen had a piece last week on the core differences between Democrats and Republicans that was an almost perfect exemplar of Cowen’s “on the one hand, to be sure” style of argument. Since I’m a “on the one hand, to be sure” guy myself, I liked the piece.

Here was the section that got the most discussion:

At the state and local level, the governments controlled by Republicans tend to be better run, sometimes much better run, than those controlled by the Democrats (oops).  And a big piece of how American people actually experience government comes at the state and local level.

This superior performance stems from at least two factors.  First, Republican delusions often matter less at the state and local level, and furthermore what the core Republican status groups want from state and local government is actually pretty conducive to decent outcomes.  The Democrats in contrast keep on doling out favors and goodies to their multitude of interest groups, and that often harms outcomes.  The Democrats find it harder to “get tough,” even when that is what is called for, and they have less of a values program to cohere around, for better or worse.

Second, the states with a lot of Democrats are probably on average harder to govern well (with some notable Southern exceptions).  That may excuse the quality of Democratic leadership to some degree, but it is not an entirely favorable truth for the broader Democratic ethos.  Republicans, of course, recognize this reality.  Even a lot of independent voters realize they might prefer local Republican governance, and so in the current equilibrium a strong majority of governors, state legislatures, and the like are Republican.

The readers in the comment section pushed back that much of the differences in governance, particularly at the municipal level, were due to race: black-dominated cities were both Democratic and (often) poorly governed, but this wasn’t the fault of the Democrats.

The correct answer, I think, is to point out that racial composition and poverty are not “exogenous to the model”– i.e., office-holders themselves shape who lives in a place, and the people who live in a place then in turn shape who the office-holders turn out to be.

This gives me an excuse to trot out a hypothesis about dysfunctional cities and neighborhoods, that you might call “the Trenton Resource Curse.”

Trenton, New Jersey isn’t necessarily the best example of this phenomenon, but it’s one I know reasonably well.

Trenton, on paper, has a lot going for it. It has easy train connection to New York and Philadelphia, is part of the economically-zooming Princeton corridor, has lots of pretty colonial architecture and 19th century mansions, and has famously good pizza and some halfway decent museums. You’d think that a place like this with a shorter commute to Philly than Bucks County or parts of the Main Line (at least if you’re willing to shell out for Amtrak) and a shorter commute to midtown Manhattan than parts of Queens, would not have dozens of what appear to be perfectly adequately-built houses selling for under 50K. Why hasn’t it ever gotten gentrified? Yes, there’s lots of violent crime, and an incompetent police force that clears less than 50% of the shootings.  But if places like the Red Hook housing projects  or the Gowanus Canal Superfund site can do it, why not Trenton?

My theory is that places like Trenton basically have a resource curse problem like oil states, and that housing is the principal mechanism for this. As the blogger Atrios has often complained about Philadelphia, local politicians talk about affordable housing, but Philadelphia poor people don’t have an affordable housing problem, they have a no money problem:

Philly doesn’t have an affordable housing problem. Philly has a poverty problem.

Lack of affordable housing becomes an issue when land prices increase greatly, increasing prices/rents generally and encouraging developers and landlords to develop and redevelop more upscale units. Land prices in much of Philly are still really cheap. We had decades of population loss, only just (maybe) reversed.

Whatever the merits of that development, it’s proposed for an area that by any measure has lots of affordable housing already.

Now I’m all for helping poor people. I would give them all of Donald Trump’s moneys and some of mine, too. But housing isn’t unaffordable for poor people here because it’s expensive, it’s unaffordable because there are a lot of people living in poverty.

I would agree with this, but I would add that, because  of how subsidized and leveraged American housing, particularly in urban areas, already is, building additional new housing in a flooded market puts existing homeowners in an untenable situation and encourages them to default, and is a huge disincentive to any upwardly mobile person from moving in and trying to improve the neighborhood over time. Trenton has oodles of dirt-cheap (by American standards) homes available, but the municipal and state government keep building new townhomes and mixed-income developments, on the theory that somehow they are going to attract middle-class homeowners that way, when more likely they’re making it impossible for the market ever to clear.

The resource curse goes beyond housing : the state government throws around enough money in general to keep more competitive businesses from moving in. Public services get showered with dough (Trenton schools get over $23,000 per kid) but are terribly administered because the local pols have enough cash to be secure in their jobs without any kind of accountability (until the feds belatedly show up to indict them.) Poor people stay, in part because of the ample availability of housing and services targeted toward them, but you don’t get the stabilizing influence of working two-parent families or the creative influence of gentrification, because of the available of better suburbs and safer-but-still-creative cities just around the bend.

Oddly enough, both Scalia and Alito were more-or-less from Trenton, as is Jay-Z.



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