Iowa City Manifesto – An Outsider’s Response

The following is a detailed and researched response to my piece – An Iowa City Manifesto for the Future – written by my friend Cassius.

Having been completely ignored by the extremely conservative local media, and largely derided in social media by the dull and unimaginative, I was glad to have finally received a worthy response to my efforts. Unfortunately it came from an old friend in the state of Washington, and not one of the members of this supposedly open-minded, progressive and intelligent community.

While Cassius suggests that many of the items on my list face incredible challenges, that is not something I did not already know. Of course such a grand scheme would be difficult to pull off. But nothing is impossible, and even if it is, you don’t know until you try.

Meanwhile the trends in automation and employment will continue to lead us toward a huge problem. Iowa City has already gone to great efforts to attract as many new residents as possible, with no long term plan for how to sustain that population in the face of these growing issues.

You may not have liked my plan, but there is no other plan. There is no way an attempt to implement my plan could be any worse than having no plan at all.

Here is Cassius response to my manifesto. It is well researched and well written. It provides specific issues and challenges, giving us a place to look at those challenges and figure out how we might overcome them.

If you plan to respond to this manifesto, take a hint from my friend Cassius, and do so respectfully with intellectual rigor instead of the reactionary naysaying I received before. That is not how intelligent people respond, and if we are to carry on the charade that Iowa City is an intelligent place, then at least get in proper character.

Part 1

As the income gap in the US continues to widen, it is certainly far past time for citizens to do something about it. The General government and the various State authorities have shown no real interest, so it falls upon the communities to do what they can. The problem is that they have been stripped of their traditional authority, and have become mere administrative units, whose main responsibilities are things such as libraries, buses and waste removal.

About a decade ago, I worked with a local university and a global consulting group on comprehensive community development models. My small part was looking at the effect various schemes had on internal migration patterns in China–specifically on non-Hukou low skilled labor, and the resulting two-tiered citizenship problem. This is one of the biggest problems with community development.

When a community decides to institute broad social programs, it is faced with the problem of either grandfathering in existing residents at the exclusion of others, trying to control population influx, or facing a deluge of newcomers who arrive to exploit the system–eventually leading to its insolvency. None of these are good options. The Chinese decided on a combination of grandfathering and restrictions on internal immigration and this has caused massive social problems.

This has led many to believe that truly comprehensive social reform can only be implemented at the General level, especially when it comes to guaranteed minimum income and health insurance.

Although the main focus was Chinese community development, we looked at many other models across the globe as points of reference. Below are some of the main findings:

1. Overly ambitious projects failed because they went bankrupt and/or became politically toxic. Usually the former was the reason for the latter. Also, overly coercive measures, as well as corruption, sometimes turned the populace against the various projects;

2. Projects needed to be implemented slowly and incrementally. Pluralistic forms of government did not seem to do as well with this, since high political turnover made long term planning extremely problematic;

3. Projects need to be well funded, either through grants, philanthropy or FDI that was given significant tax incentives;

4. Communities needed to be given high levels of political sovereignty, or the projects would be stalled and ultimately ruined by bureaucratic red-tape and interference from higher levels of government;

5. There was no magic solution that would work in all circumstances. Some communities were for the time being essentially hopeless, and successful plans were specific to time, place, as well the community’s inherent strengths. There are no pure analogues in the physical world, and many failures were the result of bandwaggoning; and

6. Diligent research and competent local leaders were obviously essential to success.

Many of the Chinese plans worked. Beijing set up Special Economic Zones as test cases. Local officials were freed from most interference from the dozen or so levels of government (and parallel party institutions) above them, and capital gains from outside investment was taxed at very low levels, often not taxed at all. In 1980 there were 4 SEZs, and now there are thousands.

As I see it, the main problem with implementing such programs in the US is mostly political. DC and the various state governments are jealous guardians of their political control, and I don’t see them allowing local communities the freedom to experiment with ambitious community improvement. They lack the intelligence, foresight, ambition, drive, vision, and perhaps most importantly the power of the post-Mao government, and seem perfectly willing to muddle along until the current situation develops into an eventual existential crisis

Part 2

I have never visited IC, and therefore cannot possibly know what its citizens could do to try to improve their collective lot. Another problem is that the large proportion of non-permanent student residents makes the data difficult to analyze. For example, the huge spike in poverty in the 18-25 cohort is probably a result of the University of Iowa. These students technically live below the poverty line, although I am quite skeptical that they really should be included among the ranks of the poor—at least not yet. I do however have a pretty good idea of what some of the potential problems might be. A few follow:

1. Most importantly, at this time, IC lacks the necessary political autonomy to effectively create significant social change. Power is concentrated in Des Moines and DC. This is especially true of the legal and educational systems;

2. IC currently lacks the money to fund ambitious projects. Both the US and the Iowa already impose onerous taxes—Iowa has the highest corporate tax rate in the nation (20% above 2nd place), a state income tax, as well a state sales tax—and, after DC and Des Moines get their cut, there is little left for the city. IC also has a low median income, median wealth, and GDP/capita—well below the national average. IC has no true elite class that can be used as a revenue base. Local elites are not truly elite by national and global standards, and would be more accurately described as relative-elites or petty-elites;

3. There is the obvious problem of getting the local population to agree. Unlike China, the US Midwest has a populist, pluralistic tradition where local governments can be replaced very easily, sometimes for trivial reasons. Obtaining consent for ambitious projects will be difficult at best. Dissenters are free to amount opposition campaigns or simply leave;

4. True clockwork factories do not exist—yet. They all need people to fix and maintain them. The closer they get to true clockwork, the more expensive and complicated they become. They fail often, and are forced to operate at a loss for years before ever turning a profit. To remain competitive, they are forced to operate at a massive scale and could easily cost the equivalent of several years of IC’s entire GDP. With a capital budget of around $40M (The largest automated factories cost 1,000 times that), and a very small population, they are entirely out of reach. The only way to remedy this would be to appeal to outside funding. This would also be difficult since IC is not allowed to issue anywhere near that amount of municipal paper, venture capital and wall street are probably going to look at the initial conditions as far from ideal, and government grants of that size are extremely rare, and even if they were available, would probably go to more qualified candidates; and

5. While IC has a nominally well-educated population, with a relatively high percentage of bachelor’s degree holders, the economy is heavily skewed towards moderate to low end tertiary bureaucratic and technician positions, especially in the fields of healthcare and education. The secondary economy accounts for only 8% of economic output, and does not lend itself to export driven manufacturing. Also, IC has a very large transient university population that does bring in a considerable amount of outside money, but does not contribute to the community in the same way that the upper-middle class and industrial workers do.

Given these limitations, it seems to me that IC might want to start modest and work its way up. Although challenging, your ideas for reducing homelessness, free or extremely subsidized transportation, as well as wifi are probably doable. While IC certainly has more than its fair share of limitations, it also has its strengths:

1. IC is fairly homogenous in many demographic dimensions. This helps since it is very difficult to get highly diverse populations to agree on anything substantial. Despite all the preaching in the public brainwashing institutions, diversity is overrated.
2. IC is relatively compact, and this would make an improved transportation system easier to build and maintain.

3. IC citizens have a decent base of education, and this makes them easier to retrain if necessary
4. IC does not have a large sector living in extreme poverty who are essentially wards of the government. This means that social programs would be less expensive per capita than they would be in some of the nation’s larger slum-ridden cities.

5. IC does not have the significant crime problems that many other cities have.

Well that’s my take on things. Again, I would suggest starting small and working up. Instituting more modest improvements first gives community leaders valuable experience when it comes time to get more ambitious.

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