Saturday, February 14, 2009

Voting with their feet...

In the 1949 East German election, socialist parties gained 76% of the vote and in subsequent elections they garnered nearly 99% of the vote. Based on the electoral results, we would assume that support for socialist policies was very strong. But, at the same time 1000's of people were "voting with their feet" and fleeing East Germany for West Germany. With their feet they were registering the discontent that socialism produced for them and many of their less fortunate countrymen.

Equally, we can learn a lot about the true feelings of Americans towards political and economic policies by observing how they vote with their feet. Between 2000 and 2005, Cook County lost more people than any county in the nation. In 2007 Chicago lost a staggering 5.5% of its population. California experienced a net loss of 144,000. Interestingly, the population losses were far more dramatic in middle class and white populations, which to a large degree overlap. The large population loss of native born Americans were partially offset by a large increase in immigrant populations in the the aforementioned areas.

So, there is no debate that a large segment of the middle class is dissatisfied with political and economic policies in Chicago, Cook County and California. The only question open for debate is what are they dissatisfied with, what are they fleeing from? And also, what are they migrating to.

Fundamentally, the middle class is fleeing areas in which the burden of the state has grown excessive. These families do not necessarily hold conservative philosophy towards big government; rather, they are leaving because of the economic burdens created by an ever increasing state. To fund their bloated administration, Cook County has levied the highest sales tax in the country and has continuously raises property taxes, even as home values have plummeted. And at every turn Chicago increases the burden on its citizenry by taxing and regulating every productive endeavor.

Under this scenario, the only populations that has an incentive to remain are the net beneficiaries of government services and the minority of individuals that are wealthy enough to pay the exorbitant taxes. And the middle class who financially or philosophically cannot bear the heavy handed transference of wealth, is the first to leave. When the population of those who are dependent on government services exceeds the middle class, the latter group loses the electoral power to vote in officials who will protect their interests. Faced with this situation, their only option is to walk away and find greener economic and political pastures. The only force that tethers the middle class to Chicago is the city mandate that public employees, such as firemen and teachers remain within the confines of the city. Without this highly undemocratic policy, an even larger segment of the middle class would flee. I believe that this exodus is a major underlying factor in the daunting deficits that California and to a lesser extent Illinois faces.

Liberal critics of my analysis will most likely counter my position will the following response: "they aren't fleeing the growth of the state, they are fleeing a lack of job opportunities..."

My response is: yes, a lack of job opportunities is also a large factor, but the exodus of jobs from Illinois and other areas is also connected with the tax and regulatory burden placed on businesses. When a locality makes it costly to do business, businesses flee, taking precious jobs and revenues with them. And anyone who has ever done business in Chicago and Cook County can tell you that the normally costly and time consuming task of obtaining permits and licenses is compounded by corruption and favoritism.

Also, many families are certainly voting with their feet against Chicago's generally terrible public schools. As quality suburban school districts show, most parents are willing to pay high taxes and high housing costs IF their children receive quality education. But, in the case of Chicago where terrible schools are coupled with high taxes and high housing costs, there is little reason to remain. And there is no doubt that to address the exodus, we must address the access to quality education. Why the schools are terrible and what can be done are complex topics that will be addressed in future posts.

Unfortunately, but undeniably people are voting with their feet against demographic changes. When neighborhoods in Chicago, as well as suburbs like Cicero and South Holland reached a demographic "tipping point," whites fled in droves. Most "progressives" will solely attribute this to racism. While racism can be a factor, I believe that social problems (gangs, crime, litter etc.) that occur alongside the diversification of neighborhoods are the main impetus for "white flight."

I base this on my years of experience working with landlords and tenants throughout Chicago. Contrary to my expectations landlords in upscale neighborhoods, such as Lincoln Park, Gold Coast and Winnetka never displayed the slightest reservation about renting to African-Americans or Latinos. The reason for this is that the landlords knew that African-Americans and Latinos moving into upscale neighborhoods were identical to their white counterparts in terms of education and professional development. Accordingly, there was no rational reason to believe that the diversification of their upscale neighborhoods would result in an increase of social pathology. So, few if any neighbors will "vote with their feet" against diversity.

Conversely, landlords in working class neighborhoods, that bordered blighted areas, knew that few if any educated and upwardly minorities would gravitate towards their working class, ethnic (Irish, Polish, Italian etc.) neighborhoods. The said individuals would seek out neighborhoods were equally educated and upwardly mobile individuals congregated, such as Lincoln Park and Hyde Park. They knew that a notable portion of the African-Americans and Latinos seeking to enter their neighborhoods were less educated and less financially stable than the current residents. Common sense and urban history dictated that a demographic shift would recreate the same social pathologies that characterized predominantly African-American and Latino neighborhoods.

So, the question is what government policies (if any) have resulted in the comparative deficit of social capital (education, skills, civic mindedness) found in the aforementioned communities?

I would say that first and foremost the same government created problems that caused whites to vote with their feet, cause educated, upwardly mobile African-Americans and Latinos to flee their own neighborhoods. Shitty schools and crushing taxes burden all productive citizenry, regardless of race or ethnicity. And attempts by wealthy "progressives" who send their children to private schools, to block efforts at school choice must be equally alienating. The end result is that many communities are left with few viable role models.

Another important issue is immigration, specifically the skills and education level of different immigrant groups. The reason why crime and social pathology are more pronounced in Latin American communities as opposed to Indian and East Asian communities is NOT because one group is better than another. The reason is that our immigration policies has tended to draw in the most educated, upwardly mobile segments of India and East Asia and conversely the least educated, least skilled segments of Latin America. In a post-industrial economy that increasingly rewards highly skilled and educated workers and economically punishes unskilled workers, this is a recipe for a proliferation of poverty and social pathology. So, indirectly people are voting with their feet against our current immigration policies.

We may agree or we may disagree with how our fellow citizens vote with their feet. But, we can all agree that it's a troubling phenomena, because it shows that many citizens believe that the ballot has failed them, that open and honest debate has become increasingly difficult and "real change" has become all but impossible. Regimes that ignore how their citizens' votes are destined to perpetually repeat their errors until they finally collapse. This was true for East Germany and it will be equally true for Cook County and California.

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