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The impact of political ideology on socioeconomic and budgetary dynamics

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Title:
The impact of political ideology on socioeconomic and budgetary dynamics
Creator:
Koven, Steven G
Copyright Date:
1982
Language:
English

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Subjects / Keywords:
Bond rating ( jstor )
Capital cities ( jstor )
Capital expenditures ( jstor )
Cities ( jstor )
City politics ( jstor )
Conservatism ( jstor )
Liberalism ( jstor )
Political ideologies ( jstor )
Socioeconomics ( jstor )
Taxes ( jstor )

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University of Florida
Holding Location:
University of Florida
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All applicable rights reserved by the source institution and holding location.
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09528711 ( oclc )
ABW4442 ( ltuf )
0028823202 ( ALEPH )

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THE IMPACT OF POLITICAL IDEOLOGY ON
SOCIOECONOMIC AND BUDGETARY DYNAMICS









By

STEVEN G. KOVEN


A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF
THE UNIVERSITY OF FLORIDA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF DOCTOR OF PHILOSOPHY




UNIVERSITY OF FLORIDA


1982






























Copyright 1982

by

Steven G. Koven













ACKNOWLEDGMENTS


Many people have contributed to my intellectual development as a

political scientist, and a debt of gratitude is owed each of them.

The person who looms largest in my intellectual maturation is the

chairman of my supervisory committee, Dr. Bert E. Swanson. He provided

the patience, guidance, and encouragement necessary for the completion

of this research. He also allowed me to draw upon his years of accumu-

lated expertise in the area of urban politics. Other members of my

supervisory committee, Dr. William A. Kelso, Dr. Alfred B. Clubok,

Dr. James W. Button, and Dr. John M. Nickens, also contributed to this

research. Special appreciation is given to Dr. John M. Nickens for his

assistance in answering questions dealing with statistical techniques.

I would also like to thank Dr. William A. Kelso for his honesty and in-

sight into bureaucratic procedures.

Dr. Manning J. Dauer and Dr. Richard Scher have helped in the

development of my research and teaching capabilities. I would like to

thank both of them for their kindness and consideration.

I also wish to thank my parents for instilling the values that

made completion of this task possible. My wife, Andrea, deserves

special commendation for her understanding and encouragement through-

out my doctoral studies.














TABLE OF CONTENTS



ACKNOWLEDGMENTS . . . . . .

LIST OF TABLES . . . . . .

LIST OF FIGURES . . . . . .

ABSTRACT . . . . . . .

CHAPTER

1 INTRODUCTION . . . . . .

The Setting . . . . . .
Influence on Local Policy Making . . .
Influence of Ideology at the Local Level . .
Philosophical Differences Between Ideologies .
Ideological Transition . . . .
Empirical Differences Between Ideologies . .
Conclusions . . . . . .
Notes . . . . . .

2 CONSERVATIVE PERSPECTIVE . . . .

Introduction . . . . .
Major Themes of Conservative Political Ideology .
The New Right . . . . .
Influence of Conservative Values on Local Government
Summary . . . . . .
Notes . . . . . .

3 LIBERAL PERSPECTIVE . . . . .

Introduction . . . . .
Liberal Thinkers . . . . .
Social Welfare Legislation . . . .
Radical Perspectives . . . .
Neoliberal Positions . . . .
Implications of Ideology to Local Government .
Summary . . . . . .
Notes . . . . . .

4 NEXUS BETWEEN IDEOLOGY AND SOCIOECONOMIC VARIABLES .

Introduction . . . .
Development of Concept of Ideology . . .


Page
iii

vii

ix

xi











CHAPTER


Dialectical View of Ideology . .........
Empirically Characterizing Cities by Ideology .
Ideological Versus Regional Salience . . .
Bond Ratings, 1981 . . . . .
Changes in Bond Ratings Over Time . . .
Socioeconomic Indicators . . . .
Summary . . . . . .
Notes . . . . . .

5 NEXUS BETWEEN IDEOLOGY AND BUDGET VARIABLES . .


Introduction . . . .
Problems of Comparability . . .
Decision Rules . . . .
General Expenditures . . .
Revenues . . . .
Comparison of per Capitized Budget Variables
Comparison of Changes in Budget Variables by
(20 Years) . . . .
Municipal Budgeting Strategies . .
Growth of Budget Variables . . .
Summary . . . . .
Notes . . . . .


by Ideology
Ideology


6 CASE STUDY OF NEW YORK CITY . . . .


History of Social Consciousness in
Budget Trends in New York City .
Causes of Fiscal Crisis . .
Implications of Crisis . .
Summary . . . .
Notes . . . .


New


York
. .
* .


City


7 CASE STUDY OF DALLAS . . . . .


Introduction . . .
Image of the City . .
Economic Growth . . .
Budget Trends . . .
Relative Importance of Budget Varia
Index of Relative Success .
General Comparison of Both Cities
Tax Revolt Issue . .
Summary . . . .
Notes . . . .


. .
. .
. .

bles
* .
. .
. .


8 CONCLUSIONS . . . . . .

Basic Concerns of Study . . . .
Findings of Research . . . . .


92
94
96
96
96
97

103
106
112
118
122

124

124
126
148
155
158
161

164

164
165
168
170
176
188
190
191
193
195

196


Page










CHAPTER


Underlying Themes . . . .
Dynamic vs. Static View of Budgeting .
Ideological Influence on Budgeting .. ...
Decline of Saliency of Liberal Ideology .
Restatement of the Problem . . .
Notes . . . . .

BIBLIOGRAPHY . . . . . .

APPENDIX


A AMERICANS FOR DEMOCRATIC ACTION SCORES, BY
CITIES . . . . .

B CHI-SQUARE VALUES . . .

C PERFORMANCE OF SOCIOECONOMIC VARIABLES .

D STANDARD ERROR OF DIFFERENCE . .

E NUMBERSOF SERVICES ASSUMED BY CITIES .

F PER CAPITAL REVENUES, FY1978-79 . .

G PER CAPITAL EXPENDITURES, FY1978-79 .

H REVENUE GROWTH 1959-79 . . .

I EXPENDITURE GROWTH, 1959-79 . .

BIOGRAPHICAL SKETCH . . . .


DISTRICT


TS WITHIN


Page

206
206
208
209
213
219

223


232

238

239

240

244

245

247

249

251

253


.I.~. .....














LIST OF TABLES


Table Page

1-1. Ideological Differences Between Conservative and Liberal
Cities . . . . . . 6

2-1. New Right Candidates Supported . . .... .33

4-1. Ideological Ranking of Cities by ADA Scores . ... 74

4-2. Municipal Bond Ratings, 1961 and 1981 . .... .78

4-3. Bond Ratings, 1981: Speculative and Upper Grade .... 79

4.4. Changes in Bond Ratings: 1961-81 . . . 79

4-5. Differences in Socioeconomic Variables Between Liberal and
Conservative Cities . . . .... .82

4-6. Differences in Socioeconomic Variables Between Liberal and
Conservative Cities (New Orleans and San Jose Omitted) 84

4-7. Differences in Growth of Socioeconomic Variables Between
Liberal and Conservative Cities, 1950-70 . ... 86

4-8. Differences in Growth of Socioeconomic Variables Between
Liberal and Conservative Cities, 1950-70 (New Orleans
and San Jose Omitted) . . . .... .87

5-1. Per Capita Revenues in Liberal and Conservative Cities,
FY1978-79 . . . . ... .. .99

5-2. Per Capita Expenditures in Liberal and Conservative Cities,
FY1978-79 . . . . . . 102

5-3. Growth of per Capita Revenues in Liberal and Conservative
Cities, 1959 to FY1978-79 . . . . 104

5-4. Growth of per Capita Expenditures in Liberal and Conserva-
tive Cities, 1959 to FY1978-79 . . . .. 109

5-5. Growth of per Capita Expenditures in Liberal and Conserva-
tive Cities, FY1977-78 to FY1978-79 . . .. 110

5-6. Absolute Growth of Budget Variables in All Cities, 1959 to
FY1978-79 . . . .... .. .. .. 113










Table Page

5-7. Relative Growth of Budget Variables in All Cities, 1959
to FY1978-79 . . . ... . 114

5-8. Growth of Spending in Dependent and Independent School
Districts . . . . ... . 117

5-9. Growth of Public Welfare Spending in Cities and Counties 119

6-1. Per Capita Expenditures, 1971 . . .... 127

6-2. Changes in Expenditures in New York City from FY1975-76 to
FY1976-77 . . . . ... .... .. .143

6-3. Changes in Expenditures in New York City from FY1975-76 to
FY1978-79 . . . ... ... .144

6-4. Percent Change in Weight of Revenue Sources,.1959-79 .145

6-5. Change in Weight of Expenditure Categories: New York City,
1959-79 ..... .... ..... .... . 146

6-6. Relative Success of Individual Governmental Agencies, 1959-
79 . ... .. . . . .. .. .147

7-1. Estimated State and Local Tax Burden for a Family of Four,
1977 . . . . . . 169

7-2. Change in Weight of Revenue Sources: Dallas and New York
City, 1959-79 . . . . ... ... 183

7-3. Change in Weight of Expenditure Categories: Dallas and New
York City, 1959-79 . . . .... 185

7-4. Growth of per Capita Expenditures: Dallas and New York
City, 1959-79 . . . .... .. .. 187

7-5. Index of Relative Success: Dallas and New York City, 1959-
79 . . . . .. . .. .189

7-6. Growth in Budget Variables: New York City and Dallas,
1975 to 1978-79 . . . ... .. 194


viii














LIST OF FIGURES


Figure Page

2-1. The Laffer Curve . . . . ... .. 26

6-1. New York City: Revenue Sources . . .. 129

6-2. New York City: Total Taxes . . .... .130

6-3. New York City: Intergovernmental Revenue . ... 131

6-4. New York City: Property Taxes. . . 132

6-5. New York City: Charges and Miscellaneous Revenue 133

6-6. New York City: Expenditures. . . . 135

6-7. New York City: Total Expenditures . . .... .136

6-8. New York City: Social Welfare Expenditures, Public Welfare,
Education, Health,and Hospital . . .... .137

6-9. New York City: Urban Service Expenditures (Police, Fire,
Sanitation) . . . . . 138

6-10. New York City: Amenity Expenditures (Library, Parks and
Recreation) . . . . . 139

6-11. New York City: Infrastructure Expenditures (Highway,
Sewage, Housing) . . . . . 140

6-12. New York City: Overhead Expenditures (Financial Adminis--
tration, General Public Buildings, General Control) 141

7-1. Dallas: Revenue Sources . . . .. .171

7-2. Dallas: Intergovernmental Revenue . . .... .172

7-3. Dallas: Total Taxes . . . . 173

7-4. Dallas: Property Taxes . . . .... .174

7-5. Dallas: Charges and Miscellaneous Revenue . ... 175

7-6. Dallas: Expenditures (Urban Services, Infrastructure,
Overhead) . . . . .. .. . .177










Figure Page

7-7. Dallas: Total Expenditures . . . .... .178

7-8. Dallas: Urban Service Expenditures (Police, Fire, Sanita-
tion) . . . .. .. .. .179

7-9. Dallas: Infrastructure Expenditures (Highway, Sewage) 180

7-10. Dallas: Amenity Expenditures (Library, Parks and Recrea-
tion) . . . . ... . .181

7-11. Dallas: Overhead Expenditures (Financial Administration,
General Public Buildings, General Control) . ... 182














Abstract of Dissertation Presented to the Graduate Council
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy


THE IMPACT OF POLITICAL IDEOLOGY ON
SOCIOECONOMIC AND BUDGETARY DYNAMICS

By

Steven G. Koven

December 1982

Chairman: Bert E. Swanson
Major Department: Political Science

The salience of political ideology in determining public policy

has long been an issue discussed in the field of political science. In

the past, some authors have discounted the importance of political vari-

ables and extolled the virtues of economic variables as a determinant of

public policy. Other authors continued to support the importance of

political variables and discounted the relevance of economic variables.

This dissertation investigates the impact of political ideologies on

outputs and outcomes in large American cities.

Cities are excellent laboratories in which to study the impact of

phenomena. Impacts of political ideologies are compared between groups

of cities differentiated on the basis of political perspectives. It

was assumed that, if ideologies do in fact matter, differences between

these groups of cities would emerge. Distinctions in regard to socio-

economic variables and budget outputs were explored and found to exist.

In general, conservative cities were associated with more positive

trends in variables measuring economic development, population growth,

xi











and ethnic composition. Conservative cities also differed in regard to

budget outputs in the areas of intergovernmental revenue, general revenue,

and general expenditures. These cities were less dependent upon inter-

governmental transfers and more likely to have a public sector of

limited scope.

The budgetary distinctions that were discovered between the differ-

ent ideological groups of cities appear to have been shrinking over the

past twenty years. A convergence of outputs was discovered in these

cities. A convergence of political philosophies was also noted in the

case studies of New York City and Dallas, with New York City adopting

conservative policies of economic stimulation and Dallas displaying a

willingness to accept present or higher levels of taxation.

The salience of political ideology is also evident on the national

level. Distinct shifts in priorities can be attributed to the change in

philosophies of our leadership and the need to implement policies which

reflect the change in ideology. An understanding of the policy implica-

tions of changes in ideologies is pursued in this dissertation. Sensi-

tivity to the implications of political ideology appears to be especially

relevant today.















CHAPTER 1
INTRODUCTION


The Setting

While some cities beautify a few square blocks and some downtown

areas are experiencing real estate booms, the outlook for large American

cities is not promising. Projects such as the Renaissance Center in

Detroit, Harborplace in Baltimore, and Fanueil Hall Marketplace in Boston

have received a great deal of attention, and at a casual glance may

provide evidence to some that cities are on the way back to prosperity.

Careful analysis, however, reveals this is not the case. A more accurate

perception is offered by Anthony Downs, who termed such projects as

"islands of prosperity in a sea of decline."1

Many catchy phrases have been utilized to describe the plight

of cities. Norton Long termed cities reservations. Like an Indian

reservation, the poor, the unwanted, and the helpless live visited by

those who make a career out of helping.2 According to George Sternlieb,

cities have turned into sandboxes. Inner city residents are like

children who play in the sandbox while adults (government bureaucrats)

have complete control over the activities in the sandbox. They may

choose to provide carrots (benefits) in order to make the children happy

or the stick (repressive police measures) in order to control unruly

behavior.3 The consequences of reservations or sandboxes are in

Sternlieb's words both cruel and disagreeable.











Manuel Castells claims that urban problems are the result of funda-

mental structural contradictions inherent in the pattern of capitalist
4
accumulation in the United States. The results of these contradictions

is a breakdown in the social order which perils the management of the

urban system and leads to a fiscal crisis in central cities. This

breakdown in social order may have led to the rioting and looting

experienced in large cities during the sixties and seventies as well as

the flight of middle-class white residents to the suburbs and other

nonurban areas.

In many large American cities, income suppliers or taxpayers are

leaving while income recipients or welfare cases remain. Ira Katzelson

explains that this trend in large cities is the result of new urban

growth patterns. Katzelson further explains that the cause of this

trend is due, in part, to the exodus of industry with unskilled jobs.

This exodus is attributed to a number of factors: high taxes, high

wages, high crime, and high real estate values. Today, only headquarters

for large corporations remain in the center cities, industrial functions

having long ago relocated. Large cities will have to come to grips

with this basic problem if they hope to recover and rebuild.

Influences on Local Policy Making

A number of authors have looked into the determinants of public

policy: investigating the linkage between public policy and a wide array

of political and environmental variables. Thomas Dye explored the

association between environmental factors such as wealth, urbanization,

economic system, education levels, inequalities, class structure, racial

composition, and religious make-up, with political systems such as











governmental form, constitutional type, bureaucracy, party system, power

structure, patterns of participation, and level of conflict. Dye dis-

covered that economic variables such as urbanization, industrialization,

wealth, and education had a greater effect on policy than political

variables such as degree of interparty competition, level of voter turn-

out, extent of malapportionment, and Democrat or Republican control of

state government. Hofferbert concurred with Dye's findings that

environmental or economic variables have an influence on public policy

independent of political variables such as malapportionment and party

competition.

Other authors focused upon political structure as a determinant

factor in public policy. Lineberry and Fowler maintained that unreformed

structures maximized a political system's responsiveness to groups

and interests in the population. Reformed governments such as the manager

or commission form of government were discovered to insulate decision

makers from potential conflicts and give professional managers more
8
power.

This study will focus upon political ideology as a determinant of

public policy. Political ideology in this sense refers to perceptions,

goals, and ideals which are deeply held. It refers to a particular

frame of reference in regard to political views. This broad frame of

reference will be dichotomized into two groups (liberal and conserva-

tive) and empirically tested for differences in outputs (budget alloca-

tions) and outcomes (socioeconomic variables).

It is contended in this dissertation that while some political

variables may have negligible effects on determining public policy,











political ideology in the broad cultural sense does, in fact, affect

public policy. While political ideology has not received a great deal

of attention as an explanation of local public policy, some authors have

focused upon its policy effects. Paul Peterson and J. David Greenstone

maintain that the most familiar model to explain public policy at any

level is the "electoral organizational interest" model which views

policy as the product of exchange and compromise between interest groups
9
and politicians. The authors found, however, that this model did not

always explain behavior. When ideologies were perceived to be relevant

in community-action controversies, they took precedence over electoral

interests.0 Agger, Goldrich, and Swanson also stated that policy may

be influenced by political ideology. This is the case especially when

the policy-making processes become highly conflictual:

The maintenance of political hostility would seem to contra-
dict the pluralist conception of American community politics as
being marked by consensual compromises on the part of hetero-
geneous political interest groups. Such hostility resulted,
for the most part, from aversion to one another's political
ideologies, and most decisional outcomes were a function of vic-
tories and defeats, not of compromises.11

If, as Agger, Goldrich, and Swanson maintain, policy is sometimes a

function of political ideology, then it is important to explore the policy

implications of ideology. This study will investigate the budgetary

distinctions attributed to ideology. It is hypothesized that budget

levels and budget priorities will differ on the basis of ideology. Each

locality must tax and provide services to its residents. Whether

differences in local budgetary policies can be linked to political ideol-

ogy is an important question.


I











Influence of Ideology at the Local Level

It is assumed that two philosophical perspectives dominate

politics in America today: liberalism and conservatism. It is believed

that each of these political philosophies ascribes to distinct sets of

values and that these values will be transformed into differing public

policies. The influence of political ideology on budgetary policy and

the performance of certain socioeconomic variables will be determined

through empirical analysis. It is assumed that liberals and conserva-

tives will differ in terms of the type and magnitude of taxes advocated.

Differences that we would expect to exist between liberal and conserva-

tive perspective are summarized in Table 1-1. Table 1-1 also describes

value differences between liberal and conservative philosophies. A major

distinction which emerges in Table 1-1 is the difference in the desired

role of government from each perspective. A desire for an expansive

government is held by liberals and a desire for a restrictive government

is held by conservatives. In terms of budgetary policy, one assumes that

liberal philosophies will be more receptive to high rates of taxation and

spending than conservative philosophies.

Philosophical Differences Between Ideologies

A review of political philosophies will help to explain policy

differences between cities. For example, it is clear from a review of

the normative literature that conservative cities are more likely to

depend upon the free marketplace and less likely to use government activ-

ism as a means of maximizing benefits and social control. The "indi-

visible hand" of Adam Smith is invoked in order to assure us that the

majority will benefit from the actions of free individuals. Individual










































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freedom and efficiency will be optimized by policies responding to these

conservative predispositions.

Conservative philosophies, particularly supply-side economic

philosophies, incorporate the hope to stimulate economic activity by pro-

viding incentives. It is argued that people will work and produce more if

they are guaranteed a larger proportion of their earnings, or, in other

words, if taxes are reduced. The government would in turn receive greater

amounts of revenue since the size of the pie would be increased. In this

scenario, low tax rates would prevent money from flowing to nonproductive

tax shelters, such as art and race horses; money would instead flow to

profitable job-producing activities.

Conservative philosophies are associated with a constricted, limited

public sector. It is believed that government activity should be

limited to caretaker activities such as police and fire protection.

Other activities such as the provision of housing are better left to

the private sector. Regulations are viewed as illegitimate intrusions

into the private sector and restrictions on individual freedom. Values

such as individualism, freedom, and competition are extolled in this

conservative philosophy.

Conservative values are criticized by those who claim that it

justifies a cruel and unjust system of production. Frederick Engels

described the consequences of conservative philosophies in nineteenth-

century England. Engels stated that the City of Manchester reflected the

following values:

The brutal indifference, the unfeeling isolation of each in his
private interest becomes the more repellent and offensive the
more these individuals are crowded together within limited











space. .The dissolution of making into monods, of which
each one has a separate principle, the world of atoms, is here
carried out of its utmost extreme. Hence it comes too
that the social war, the war of each against all, is that the
stronger treads the weaker under foot and that the powerful few,
the capitalists, seize everything for themselves while the weak
many, the poor, scarcely a base existence remains.12

Engels presents the basic point of view that individualism left unchecked

by the larger community will create the type of situation where the few

control the many. The electoral process, however, has had the effect of

forcing conservative polities to be more responsive to the plight of the

many who were being crushed by working conditions in an industrial

society. At the turn of the century, Great Britain's social legislation

blunted some of the disruptive forces of industrial development. Legis-

lation such as unemployment insurance and old age benefits assuaged the

ravages of nineteenth-century capitalism. Much of this legislation

originally enacted in Britain was implemented by the United States

Congress at a later date.

The welfare state represents government efforts to reduce the hard-

ship of citizens in need. The cycle of boom and bust in capitalist

society described by Marx and Kondratief was not eliminated by the welfare

state, but the suffering which resulted from the cycle was reduced.

Ideological Transition

This dissertation focuses upon the linkage between political

ideology and changes in both budgetary behavior and socioeconomic

variables. Some authors claim that over the past years political philos-

ophies of the majority of Americans have moved to the right. In order to

understand the reasons behind changes in political philosophy, some of

the criticisms of liberal philosophies are explored. Conservative writers











such as George Gilder and Milton Friedman claim that the welfare state

and the liberal philosophies that provide the foundation for it inhibit

creativity, innovation, and incentive.13 The public sector is said to

be deadening because of high taxes which inhibit innovation and risk.

Gilder claims that through welfare policies, which reduce incentive

to work, the government is unintentionally creating a permanent under-

class. Friedman argues that waste and inefficiency run rampant in

government programs. Examples of government programs intended to assist

cities may even have caused more harm than good. Jane Jacobs maintained

that urban renewal hastened the decline of inner cities by destroying the

integrity of those cities.14

Robert Cassidy explained how federal housing policy accelerated

the decline of neighborhoods. Cassidy described in detail how the

Section 235 program of federally guaranteed loans resulted in high

numbers of foreclosures and housing abandonment. Shady mortgage bankers

found it more profitable to lend to marginal clients who had a high like-

lihood of defaulting. In the event of default, the federal government

paid off the loans, creating tremendous profits for lenders. Cassidy

documented that, between April 1972 and March 1977, the foreclosure rate

for FHA insured mortgages was 4.56 percent, a phenomenally high rate. A

foreclosure rate higher than 1 percent is normally considered unthinkable

in the lending business.5 A high percentage of foreclosures could have

been predicted because of the profit a mortgage company secured when a

default occurred. Cassidy claimed that the mortgage bankers would set

up field offices in racially changing neighborhoods. They would often

falsify information about family income and credit ratings. In addition,










once a family was evicted,there was no incentive to keep the house in

good condition. Mortgage bankers would then often only do cosmetic work

and bill HUD for more extensive repairs. Profits of over 30 percent

received by mortgage investors were not uncommon when the federal govern-

ment was forced to make good on guaranteed loans after recipients

defaulted.

The mortgage investor ripoff is but one example of federal funds

being diverted away from the poor by clever businessmen. Certainly there

are administrative costs which accompany any program; yet the amount of

money siphoned off from social welfare programs appears excessive. M.

Stanton Evans observed that if the government had taken the increase in

government expenditures for social programs and allocated it to the 23

million people who were poor, a family of four would have received

$32,000.16

Federal health policy enhanced the incomes of many highly paid

doctors as well as the incomes of an army of administrators. Federal

price support programs enhanced the incomes of wealthy persons in agri-

business. Federal tariff policy enhanced the incomes of industrialists

in declining industries. Robert Eisner of Northwestern University

described some of the consequences of federal price support programs.

These programs often limit competition, provide benefits to those who

do not need them, and raise the price to the consumer. Among the pro-

grams are the following:

price supports for milk as dairy prices skyrocket; trigger prices
to protect our steel industry from foreign competition as profits
of our steel industry soar; licensing agreements and route
restrictions that dramatically curtail competition in the trucking
industry, laying the ground for repeated increases in prices










and wages while trucks suffer from idle capacity and small truck-
ing firms go out of business; sugar quotas and price supports to
maintain and raise sugar prices; acreage restrictions that reduce
agricultural supply; import quotas, tarifs, and orderly marketing
agreements that limit the import of cheaper and frequently better
foreign automobiles, television sets, and textiles; and federal,
state, and local restrictions in countless occupations and
industries that reduce competition and raise prices.17

From Eisner's analysis we discover that the public sector does not function

only to benefit the weak and downtrodden. Agribusiness, protected

industry, and providers of medical services all gain substantially from

federal largesse.

Abuses of the liberal state have resulted in somewhat of a backlash

in many large cities. Tax and spending policies of liberal governments

may have a negative impact on the health of cities. Businesses may seek

to avoid paying high rates of taxes by moving from the liberal cities

with expansive governments to conservative cities with more limited

governments. The flight of business may lead to other phenomena which

are associated with decline, such as negative population growth and

increases in elderly and minority populations. Therefore, political

ideology has an effect on the well-being of cities.

In order to demonstrate the salience of ideology, distinctions

between liberal and conservative cities will be empirically delineated

by comparing budget outputs and changes in socioeconomic variables. The

following section outlines the methodology employed in exploring these

distinctions.

Empirical Differences Between Ideologies

Differences between liberal and conservative cities will be

empirically identified. Cities will be typologized as liberal or











conservative on the basis of scores assigned from the liberal organiza-

tion, Americans for Democratic Action (ADA). The following assumptions

have been made in typologizing cities:

1. Congressmen and congresswomen of a particular municipality

are representative of the political ideology of that

municipality.

2. Americans for Democratic Action can accurately identify the

ideological postures of legislators.

Implicit in assumption two is the understanding that Americans for Demo-

cratic Action explores key votes that reflect ideological positions.

Other indexes have been devised which rank congressmen and women on an

ideological dimension. These indexes correlate highly with the ADA

measure.

Once ADA scores for a municipality have been computed, the scores

will be arrayed. A cutoff point will be determined. Cities with high

ADA scores will be classified as liberal, while cities with low ADA

scores will be classified as conservative. These two groups will then be

empirically compared. Socioeconomic variables and budget variables will

be the focus of comparison between both ideological groups. The following

socioeconomic variables will be explored.

1. Bond ratings

2. Changes in bond ratings

3. Change in size

4. Ethnic composition

5. Age of residents











6. Changes in ethnic population, changes in age of residents,

changes in median income

7. Changes in total employment, changes in value added by manu-

facturing, changes in retail sales.

Analysis of these variables provides an indication of the economic condi-

tion of cities. Demographic changes also provide an indication of

desirability of cities to our mobile population. The socioeconomic

health of cities will be estimated from investigation of the variables

mentioned above.

Differences in budgetary behavior between both groups of cities

will also be explored using the following variables:

1. Per capital revenue (fiscal year 1978-79)

2. Per capital expenditures (fiscal year 1978-79)

3. Changes in per capital revenues between fiscal year 1959

and 1979

4. Changes in per capital expenditures between fiscal year 1959

and 1979

5. Budgeting "strategy" of cities.

This investigation will determine whether differences exist between the

two groups of cities: liberal and conservative.

Conclusions

A fundamental concern of this study is the role of political

ideology on public policy. This dissertation will empirically explore

policy differences between municipalities that differ on the basis of

political ideology. It is believed that specific differences between

both ideological groups will be found. Identification of these policy











differences may prove to be a useful tool in predicting future policies

and explaining present policy.

The United States appears to be in a period of ideological transi-

tion. Dormant conservative philosophies have revived and are again being

discussed. Liberal political philosophies which provided the foundation

for the New Deal are being questioned. New agendas are being set and

established policies questioned. An understanding of the effect of

ideology on policy is especially important in this political climate. It

is the aim of this dissertation to assist in providing a greater under-

standing of policy through a perspective of political ideology. This

perceptive is particularly salient in view of the period of ideological

transition and debate that we are undergoing today.

Notes

Anthony Downs, "Urban Policy," in Joseph A. Pechman, ed., Setting
National Priorities: The 1979 Budget (Washington, D.C.: The Brookings
Institute, 1978), p. 168.

Norton Long, "The City as Reservation," The Public Interest, 25
(Fall 1971), p. 22.

George Sternlieb, "The City a Sandbox," The Public Interest, 25
(Fall 1971), p. 17.

Manuel Castells, The Economic Crisis and American Society
(Princeton: Princeton University Press, 1980), p. 200.

Ira Katzelson, "The Crisis of the Capitalist City Urban Politics
and Social Control," in William Hawley, ed., Theoretical Perspective on
Urban Politics (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1976),
p. 215.

6Thomas R. Dye, Politics, Economics, and the Public (Chicago:
Rand McNally, 1966).

7Richard Hofferbert, "The Relation between Public Policy and Some
Structural and Environmental Variables in the American States," American
Political Science Review, 60 (March 1966), pp. 73-82.











Robert Lineberry and Ira Sharkansky, Urban Politics and Public
Policy (New York: Harper and Row, 1978), p. 164.

Paul E. Peterson and J. David Greenstone, "Two Competing Models
of the Policy Making Process: The Community Action Controversy as an
Empirical Test," in Willis D. Hawley, ed., Theoretical Perspectives on
Urban Politics (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1976), p. 67.

1 Ibid., p. 75.

1Robert Agger, Daniel Goldrich, and Bert E. Swanson, The Rulers
and the Ruled (New York: Wiley, 1964), pp. 14-32.

1Frederick Engels, The Condition of the English Working Class in
1844 (London: International Publishers Company, Inc., 1962), pp. 46-47.

1George Gilder, Wealth and Poverty (New York: Basic Books, Inc.,
1981); Milton and Rose Friedman, Free to Choose (New York: Avon Books,
1979).
14Jane Jacobs, The Death and Life of Great American Cities (New
York: Random House, 1961).
15Robert Cassidy, Livable Cities (New York: Holt, Rinehart and
Winston, 1980), p. 32.

16William Simon, A Time for Truth (New York: Readers Digest Press,
1978), p. 224.

17Michael Harrington, "Why the Welfare State Breaks Down," in
Irving Howe, ed., Beyond the Welfare State (New York: Schocken Books,
1982), p. 29.














CHAPTER 2
CONSERVATIVE PERSPECTIVE


Introduction

The election of 1980 provides some indication that ideology is

indeed relevant to American politics and American policy today. Whereas

in 1964 and 1972 candidates who diverted from the broad center of politi-

cal discourse were soundly defeated, Ronald Reagan won a resounding

victory with an appeal aimed right of center. The appeal of a strong

national defense, lower taxes, and lower levels of government intrusion

proved to be very popular in 1980. Reagan's appeal was firmly rooted in

conservative ideals. Values of freedom, liberty, and initiative were

extolled by the Reagan camp. These values are completely consistent

with conservative ideological philosophies. Conservative philosophies

have been transformed into conservative policies. The agenda of American

legislation has shifted to the right. These policy shifts are reflected

in the budgets. Growth of federal spending is likely to slow while ex-

penditure priorities shift. Social welfare expenditures are likely to

be viewed with increased skepticism, along with high levels of spending

in general. It is the contention of this study that budgetary behavior

reflects the ideology of decision makers as much as it reflects any

rational response to needs.

The Reagan administration budget provides evidence that ideologies

can indeed redirect priorities. Ideologies can also reverse long-

running trends. The Reagan administration appears firmly committed to










reducing public expenditures, reversing a long-term trend toward larger

and larger levels of government spending.

Given the political realities of today, the Reagan administration

has attacked spending through the strategy of cutting taxes and re-

ducing government revenue. As Reagan claimed during the campaign, not

allowing the public sector to have increased funds in the first place is

a reasonable strategy to take in trying to reduce spending. Allocation

priorities of what revenue is collected also seems to have radically

changed. Between 1960 and 1975, a period when the nation was at war,

the proportion of money spent on defense in comparison to the nation's

gross national product declined from 9.9 percent to 6.3 percent. Domes-

tic spending as a proportion of gross national product increased from

20.2 percent to 26.6 percent.

Although a fairly conservative Republican administration was in

office during a good portion of those years, Congress was dominated by

liberal legislators who advocated large increases in social spending

and decreases in military spending. Liberal legislators today have not

called for decreases in military spending but, given the mood of voters,

only call for a slower rate of increase in the massive military ex-

penditures projected by Reagan.

In order to make room for slower growth of government spending,

social welfare programs aimed at helping the poor have been reduced.

Richard Nathan estimates that over the next five years, military spend-

ing will rise by more than 40 percent, while domestic outlays are pro-

jected to decline by 15 percent.2










Conservative ideologues are likely to target public assistance

expenditures for reduction. This is true because of their attitude

that welfare or the dole reduces initiative and desire for work in the

"productive" private sector. As George Gilder has explained, if the

dollar value of benefits (AFDC, food stamps, medicaid, etc.) received

when not working is greater than the dollar value of benefits received

from working, then a rational actor could maximize his or her benefits

and material well-being by not working. Gilder claimed that any wel-

fare system will eventually extend and perpetuate poverty if its bene-

fits exceed the prevailing wages of the community. As long as welfare

is preferable (as a combination of money, leisure, and services) to

working, the system will deter work and undermine families, according to

Gilder.

Studies conducted by the Department of Health, Education and

Welfare in the cities of Denver and Seattle concluded that income guaran-

tees were dismal failures, reducing work effort by between one-third and

one-half and increasing marital breakdown by about 60 percent. These

findings are often cited by conservatives critical of federal programs
4
aimed at assisting the poor.

Gilder claimed that the object of welfare should be to help people

out from temporary problems, not to treat temporary problems as perma-

nent ones, and thus make them so. Welfare instead acts to erode work

and family and therefore keeps people poor.

Problems surrounding relief are not new. In the depression of the

1930s, it was recognized that relief created an unstable environment in

contrast to the discipline created by work. Piven and Cloward stated










that relief could not restore pride to recipients. It was merely a

device for keeping the populace from discontent and disorder.6

Conservatives of the depression era enunciated many of the themes

restated by Gilder. Members of the Federal Emergency Relief Act

(FERA) staff bemoaned in the mid-1930s that

a gimme syndrome was spreading. People were beginning to feel
that the government actually owes [relief] to them. And they want
more. Many civic leaders expressed concern that relief payments
alone did not prevent men, families and communities from deterio-
rating; after a time on the dole, they said, family relations
eroded and men no longer wanted or expected to work.7

Conservative themes such as this are being revived today. What may be

the effect of resurgent conservativism on local governments? This is

a question that is explored in this dissertation. Before the actual

effects of conservative thought can be measured, however, a thorough

understanding of the development of this ideology is helpful. A review

of major themes of conservativism will provide insights into policy

making from an ideological perspective.

Major Themes of Conservative Political Ideology

Before delineating themes of one particular ideology or another,

it is necessary to define the term. There exists no universally ac-

cepted definition for ideology although the term has been in usage for

quite some time. L. T. Sargent claimed that ideologies were based on

the value systems of society and simplified the complexity of the world

into something understandable.8 Frederick Watkins contended that

ideologies usually represented militant and revolutionary ideas which
9
opposed the status quo. David Ingersoll defined ideology as consist-

ing of an assessment of the status quo and a view of the future which











was materially better than that of the present.0 Paul Sweezy, on the

other hand, claimed that ideology was an ensemble of ideas, morals, and

rationalizations which served the interests of the ruling class.11

Max Mark claimed that ideology was usually associated with dogmatism.

It contained a particular value and the assertion that only this value

should be implemented.12 Agger, Goldrich, and Swanson stated that

ideologies include answers to a number of questions. Among other func-

tions, ideologies define what role government should play in allocat-

ing resources.3

It should come as no surprise that a great deal of confusion

surrounds the concept of ideology. It is often to the advantage of

politicians to purposely confuse potential voters and to stake out the

broad middle spectrum of political debate. In 1976 Jimmy Carter ap-

pealed to native southerners and conservatives who were opposed to

entrenched bureaucrats in Washington or anybody else connected with the

federal establishment. Carter, was cautious, however, not to antago-

nize liberal Democrats who represented powerful interests within the

Democratic party. Carter wanted to move to the right but not so far

to the right as to endanger liberal support. He was able to unify the

Democratic party and win in 1976 because, unlike McGovern in 1972, he

represented the interests of more conservative elements within the

Democratic party.

In 1980 confusion resulted when John Anderson, a conservative

Republican during his twenty years in Congress, ran for the presidency

appealing to voters who considered themselves liberals. Ronald Reagan

received strong support from conservatives but also appealed to










blue-collar workers who traditionally had been members of the Demo-

cratic coalition. Reagan often invoked upbeat references to Franklin

Delano Roosevelt, claiming that he represented the party of solutions

while the Democratic party could only counsel acceptance of economic

limitations.

Modern politics does not lend itself to an understanding of clear

ideological distinctions between candidates. Conservative and liberal

philosophies, however, differ in regard to fundamental values and

ideals. This chapter reviews major themes of conservativism in order

to provide insight into the relevance of political ideology to public

policy.

Two characteristics of American conservatives predominate in the

literature:

1. A clinging to the notions of laissez-faire economic prin-

ciples

2. A clinging to the old virtues of economic individualism and

the frontier.

Conservatives clinging to laissez-faire economic principles justify

their philosophical positions on the basis of classical liberal be-

liefs toward liberty and economic freedom. There exists general agree-

ment that conservatives in America today are characterized by a cling-

ing to these two principles. Conservatives, however, differ in regard

to priority of values. Some focus upon culture or the environment,

others emphasize moral issues, while still others concentrate upon

economic issues.










Conservatives who characterize problems of society as a result

of cultural forces include Edward Banfield, James Q. Wilson, and Daniel

Patrick Moynihan. Moynihan has been classified as a neoconservativee"

and "neoliberal," but labels have less significance than substance.

Moynihan is firmly in agreement with Banfield and Wilson that cultural

phenomena prevent the public sector from accomplishing its objectives

to assist the underclass in America.

Banfield asserted that government programs aimed at assisting the

lower classes were doomed to fail because of the nature of the lower

classes. Persons in the lower classes were characterized by Banfield

as

1. Radically improvident with a low sense of self-worth

2. Preferring immediate consumption, especially for sex and

violence

3. Taking no interest in work but working in order to live

4. Unable to maintain satisfactory social relationships with

others
14
5. Preferring violence to living in harmony.4

In contrast to lower-class individuals, upper-class individuals were

characterized by Banfield as being

1. Self-respecting and self-confident

2. Independent and considerate of others

3. Motivated by internal standards

4. Tolerant of their children's preferences

5. Opposed to bigotry and violence.15










Many have termed Banfield a racist; yet he claims that culture is a

product of socialization, not genes. Banfield concluded that little

could really be done for the lower classes because of their attitudes

and motivations. The culture in which lower-class attitudes and motiva-

tions are developed will prevent public programs from achieving success.

Banfield felt that one must first change the culture in which the in-

dividual is largely formed before improvements to the individual could

be expected to take place:

So long as the city contains a sizable lower class, nothing basic
can be done about its most serious problems. Good jobs may be
offered to all, but some will remain chronically unemployed.
Slums may be demolished, but if the housing that replaces them is
occupied by the lower class it will shortly be turned into new
slums. Welfare payments may be doubled or tripled and a negative
income tax instituted, but some persons will continue to live in
squalor and misery. If, however, the lower class were to
disappear-if, say, its members were overnight to acquire the atti-
tudes, motivations, and habits of the working class-the most
serious and intractable problems of the city would all disappear
with it.16

Moynihan was not concerned with the time orientation of individuals

which would determine class (Banfield's thesis); instead, Moynihan

focused upon the problems of the Negro family. Moynihan concluded that

the problems of inner cities were intractable because of the matriarchal

structure of today's Negro families. Because of chronic unemployment,

Negro men were unable to become strong husbands and fathers. The wel-

fare system even encouraged men to abandon their families,in which case

the family could qualify for public assistance. Moynihan believed that

problems with the Negro family made government programs inherently

inadequate.17 Like Banfield, Moynihan concluded that deep-seated

problems precluded the success of federal programs as they attempted to

alleviate the problems of the poor.










James Q. Wilson maintained that efforts to assist the poor may

even be counterproductive. This he attributed to the phenomenon of

rising expectations and what Wilson termed the "psychological urban

problem."18 The psychological urban problem relates to expectations

increasing faster than achievements. Wilson claimed that, viewed in the

historical perspective, conditions of the city in terms of housing and

poverty have gotten better, not worse. The gap, however, between the

quality of life in the central city and in the periphery has widened.

This situation has led to urban discontent. Furthermore, the discon-

tent will not be alleviated in the short run:

Efforts to lessen the gap between expectations and achievements
will, in the short run, only make the discontent produced by
the gap more acute. This is one of the inevitable tensions in
a society committed to self-improvement.19

Banfield, Moynihan, and Wilson all expressed skepticism regarding

the viability of federal programs. Each pointed to some fundamental

problems affecting the individual which prevents the success of public

programs. Today, conservative philosophies have their greatest impact

in the field of economics. Conservatives are replacing Keynesian

philosophies with supply-side and monetarist views. This marks a fun-

damental shift of economic policy in the nation.

Supply-side economics is a restatement of Say's Law, a classical

principle of economics presenting the view that supply creates its own

demand. Supply-siders maintain that in an unfettered market, produc-

tion would generate income (wages, profits, and rents) which, when spent,

would be just sufficient to clear the market of all the commodities

produced.










Two corollaries to Say's Law follow:

1. If there is unemployment and idle capacity, they can be elimi-

nated by an increase in production or the supply.

2. Policies aimed at stimulating the economy need only be con-

cerned with increasing production.

Supply-siders advocate reducing the tax rate (especially for the

wealthy who would be more likely to reinvest their income) in order to

stimulate production. National income would rise, along with rises in

productivity, which would result from increases in private investments.

Government revenues would rise, even with the lower tax rate, because

of the expansion of the economic pie. With the return of a vital

economy, government programs such as unemployment insurance would be

less costly and the budget could be balanced. Inflation would also

abate due to the increase in productivity. Producers would be able to

lower prices without sacrificing profits.

Supply-side economists emphasize the negative effect taxes play

on the economy. Arthur Laffer's primary point is that there are al-

ways two tax rates which will yield the same level of governmental

revenues.20 This is true because at a certain point governmental tax

rates become so oppressive that production falls and there is less

revenue available to tax. The Laffer Curve, first drawn by Arthur

Laffer on a napkin in a Washington restaurant, is displayed in Figure

2-1. Laffer argues that,when the tax rate is at 100 percent, all pro-

duction ceases in the money economy. People will not work in this

economy if all earnings are taxed. The effect will be the same as if

the tax rate were zero-government would not be able to collect any





























LU 3~









*r-
0
S-


S.-




















(0









U, 0








> E

C) C
cr-


=3



















Ur-




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aU
s.-
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revenue. As taxes move down to point A or up to point B, the govern-

ment begins to receive money from taxes. Point A represents a much

higher tax rate than point B, but, because of the flight from taxes into

the underground economy and into tax shelters, the amount of revenue

collected is identical. In similar fashion, government revenues will

increase by either lowering or raising taxes until point E is reached.

Point E is not a fixed number but can be represented by a high or

low number depending upon attitudes and environmental conditions. For

example, during the siege of Leningrad, Russian soldiers worked to their

physical limit though they received the barest rations for their ser-

vices.21 Under other conditions people would not voluntarily allow the

government to take the fruits of their labor with so little in return.

Point E, therefore, is more of an attitudinal value-the point at which

the electorate desires to be taxed and the point where tax revenues

and production are maximized. The idea behind the Laffer Curve is that,

paradoxically, more tax revenue may be collected by reducing taxes than

by increasing taxes. The level of support for tax programs plays an

important role in the Laffer Curve. If the populace is unsupportive of

the government in general, and taxes specifically, then increasing

taxes could drive business into the underground economy where the govern-

ment is unable to extract any revenue. High tax rates may also result

in less investment and risk taking.

From the Reagan economic program we can conclude that "Reaganomics"

is based upon the proposition that we are in the upper portion (prohibi-

tive range) of the Laffer Curve, and that lowering the tax rate will in-

crease revenues by moving down the curve until point E (optimal point)










is reached. Evidently, Reagan's economic advisors expected an increase

in investment in plant and equipment to occur along with the reduction

of taxes. This, however, has not occurred. It is unlikely that invest-

ment will occur in periods of slack demand such as a recession. Tax

cuts have resulted in greater concentration of capital with the surge

of mergers recently. They have not resulted in a surge of investment

in new plants and equipment. All of this creates doubts in the via-

bility of supply-side economics.

While the popularity of supply-side economics appears to be wan-

ing, conservative monetarists exert great influence. Conservative mone-

tarists are followers of Milton Friedman and the Chicago school of

economics. They believe that inflation can be controlled by control-

ling the supply of money. Monetarists on the Federal Reserve Board

have limited the supply of money in an effort to reduce inflation. It

appears that they have been all too successful. As Friedman maintains,

limiting the supply of money provides a cure for the ravages of in-

flation but the cure is not painless.22 High unemployment and slow

economic growth are said to accompany slower growth in the supply of

money. This has been the case in the recession of 1981-82. If any-

thing, the chairman of the Federal Reserve Board has been criticized

by the White House for not sufficiently restricting the supply of money

even though unemployment reached a post-World War II high.

Conservative economists, in general, have an orientation differ-

ent from that of liberal economists. They are fully supportive of

Adam Smith's concept of the "invisible hand." As developed by Smith,

the "invisible hand" concept provides that no exchange will take place











unless it is beneficial for all parties involved. The free market operat-

ing under the influence of this invisible hand, therefore, will provide

the greatest benefit to society in general.

Friedman presented numerous examples of the superiority of free

societies (free market economies) when compared to collective or con-

trolled societies. The most obvious example is the contrast between

East and West Germany. This is an excellent example of two nations with

common cultures-the same civilizations and same levels of technical

skills and knowledge. Friedman asks which nation has prospered and

which nation has constructed walls to pen in its inhabitants. Friedman

claims that on one side there are brightly lit streets filled with bust-

ling people. Newspapers and magazines expressing every variety of

opinion can be freely purchased. Conditions reflect the economic and

political freedoms that characterize this nation. However, "a walk of

a few hundred feet, after spending an hour filling out forms and waiting

for your passport to be returned, will take you to a city where the

streets appear empty; the store windows dull; the buildings grimy."23

Other examples abound in Friedman's analysis. Yugoslavia,

although its standard of living is lower than that of neighboring

Western nations, such as Austria, is seen as a paradise in comparison

to the Soviet Union. This is attributed to the greater degree of

economic freedom found in Yugoslavia when compared to the Soviet Union.

In the Far East, other nations that rely on private markets-Malaysia,

Singapore, Korea, Taiwan, and Japan-are thriving. The economic

development of two ancient civilizations with sophisticated cul-

tures-India and Japan-are also compared by Friedman. India is










said to have many advantages over Japan, such as natural resources, a

trained civil service, and an excellent railroad system. Friedman

claims that, despite the many similarities between Japan in 1867 and

India when it received independence in 1947, the outcomes of the two

nations' economic development were quite different. In thirty years

Japan extended social and economic opportunity to all citizens, dis-

mantling its feudal structure. Economic improvements rapidly followed.

In the thirty years following Indian independence, only lip service

was paid to the elimination of the caste system and differences in

wealth grew wider. Friedman attributes the differing success stories of

Japan and India to the fact that Japan relied primarily on voluntary

cooperation and free markets while India relied on central economic

planning.

Friedman concluded that the "deadening effects of government"

may eventually destroy both the freedom and prosperity enjoyed in the

United States:

The experience of recent years-slowing growth and declining
productivity-raises a doubt whether private ingenuity can con-
tinue to overcome the deadening effects of government control if
we continue to grant ever more power to government, to authorize
a new class of civil servants to spend ever larger fractions of
our income supposedly on our behalf. Sooner or later-and per-
haps sooner than many of us expect-an ever bigger government
would destroy both the prosperity that we owe to the free market
and the human freedom proclaimed so eloquently in the Declara-
tion of Independence.24

The spotlight in recent times has centered around economic policy;

yet moral issues occupy an important place in conservative philosophies.

Many conservatives blame the decline of America on a decline in the

moral character of its people. They believe that,in order to "make

America great again," there must be a return to a greater sense of










morality in the country. Work, family, neighborhood, and God are,
25
according to George Gilder, the pillars of our free society.5 Erosion

of those pillars has resulted in the erosion of American greatness.

This moralistic theme is espoused by politicians such as Ronald

Reagan and Jack Kemp. Reagan based a large part of his campaign on

restoring American greatness and returning to those values that made

America great. Kemp echoed this view, claiming that turning away from

the pillars of our society (individual, family, and neighborhood) and

relying upon Washington as the salvation for our problems is one of

the fundamental mistakes of American society.

Somewhere along the line we lost the focus on the individual,
the family, and the neighborhood that was once the heart of the
American Dream. Political leadership turned away from confi-
dence in the citizen as an individual, in the family as the bed-
rock of a free society, and the neighborhood as a basic unit in
the democratic framework. Attention instead turned toward
Washington, and to an infinite variety of grandiose programs and
plans that were supposed to lead or command us to a better life.26

This revival of moral posturing is indicative of the salience of reli-

gion and the New Christian Right today. The New Right firmly backed by

the New Christian Right has experienced remarkable success in recent

elections.

The New Christian Right, advocating a politics of moralism, was

successful in nominating Ronald Reagan in 1980 instead of other hope-

fuls such as John Connelly (who enjoyed the support of the business

community), Robert Dole, George Bush, and Howard Baker. The New

Christian Right also claimed credit for the election of 25 out of 30

targeted seats in the House of Representatives. Liberal Democrats,such

as Elizabeth Holtzman of New York, Robert Coats of Oklahoma, Robert

Morgan of North Carolina,and Jim Folsom of Alabama, all went down to











defeat in the Reagan landslide of 1980.27 (Table 2-1 lists the senato-

rial candidates receiving New Christian Right support and the outcomes

of their elections.28) Senators elected in 1980 will not come up for

reelection until 1986. Twenty liberal senators up for reelection in

1982 have already been targeted by the New Right. Advocates of the New

Right are gaining confidence and believe that they can now defeat

liberal candidates. Pat Robertson reflects this sentiment: "Now

America could defeat liberals, the ones who had failed to control dope,

pornography, abortion, feminism, and moral decay because they were dedi-

cated to secular humanism."29 The confidence reflected in Robertson's

observation indicates that 1980 may have been something more than a

temporary aberration. Success has brought confidence as well as funds,

and well-organized campaigns. Support from the New Christian Right has

greatly aided the larger group which is termed the New Right. The New

Right has demonstrated that it is a political force to be dealt with in

the 1980s. Blue-collar Democrats concerned about "social" issues have

combined with conservative Republicans concerned with the economy to

form a solid coalition under the banner of the New Right.

The New Right

Although the New Right is generally associated with conservative

Republican candidates, this is not necessarily always the case. The

Democratic governor of Massachusetts, Edward King, is also associated

with the New Right. King mobilized support through appealing to

"social conservatives" in the state. The litmus test for the New Right

will not necessarily be reflected in the future success of incumbent

Republicans.










Table 2-1

New Right Candidates Supported


Candidate, Senate New Right Group Outcome


John East (R-N.C.)

Frank Murkowski (R-Alas.)

Warren Rudman (R-N.H.)

Jeremiah Denton (R-Ala.)

Paula Hawkins (R-Fla.)

Charles Grassley (R-Iowa)

Don Nickles (R-Okla.)

Dan Quayle (R-Ind.)

Mack Mattingly (R-Ga.)

James Abdnor (R-S.D.)

Steven Symms (R-Ida.)

Gene McNary (R-Mo.)

Paul Gann (R-Calif.)

Mary Buchanan (R-Colo.)

Bob Dole (R-Kan.)

Jake Garn (R-Utah)

Paul Laxalt (R-Nev.)


MM, NCPAC

MM

MM

MM, NCPAC

MM, CV, NCPAC, RR

CSFC

MM, NCPAC, RR

MM, CV, NCPAC, RR

MM, NCPAC

MM, CV, NCPAC, RR

MM, CV, NCPAC, RR

NCPAC

MM, NCPAC, CSFC

NCPAC, CSFC

MM

MM

MM


, CSFC


, CSFC

, CSFC


Key: CSFC Committee for the Survival of a Free Congress
RR Religious Roundtable
MM Moral Majority
CV Christian Voice
NCPAC National Conservative Political Action Committee
W Won
L Lost










Since 1960 incumbent presidents have not fared well. Richard

Nixon was the only president reelected; yet he failed to serve out his

second term, leaving the White House in disgrace after Watergate.

Lyndon Johnson decided not to seek reelection in 1968 while incumbent

Presidents Ford and Carter were defeated in 1976 and 1980 respectively.

Irrespective of political party, the endurance of the New Right can be

observed through the policy positions of candidates. When Democrats such

as Jerry Brown campaign on the platform of law and order, balancing the

budget, and lowering taxes, evidence is provided that the agenda of

political debate has shifted to the right. Significant distinctions

exist between what has come to be known as the Old Right and the New

Right. Paul Weyrich noted a number of these distinctions. Weyrich

stated that the Old Right was strongly intellectual, pursuing a level of

discourse above the language of the ordinary man. The New Right, in

contrast, reaches the common man through a direct discussion of "gut"

social issues such as crime, abortion, busing, and pornography. The

Old Right gave primacy to laissez-faire principles. The New Right sup-

ports the free enterprise system but also realizes that people have come

to expect certain things of their government and that it is possible

to extend public services without destroying the free enterprise sys-

tem.30

The New Right is seen by Weyrich as the vanguard of a new direc-

tion for America. The Old Right was fearful of the media while, in

contrast, the New Right believed that it had nothing to hide. The Old

Right spoke abstractly about the decline of the West, and wrote off

such groups as labor unions, churches, and the working class. In











contrast, the New Right presents concrete programs that would in its

view preserve the values of the middle class, and build alliances with

groups that the Old Right disdained.

The New Right comprises what sociologist Donald Warren has termed

"Middle American Radicals" (MARs). These MARs possessed the following

characteristics in the mid-1970s:

MARs had a family income of $3,000-$13,000. There was a strong
presence among them of northern European ethnics, although
Italians tended to account for more MARs than other groups.
MARs were nearly twice as common in the South as in the north-
central states. They tended to have completed high school but
not to have attended college. They were more common among
Catholics and Jews than among Protestants, and among Mormons and
Baptists than among other Protestant sects. They tended to be
in their thirties or in their sixties and were significantly less
likely to be professional or managerial workers than to be skilled
and semi-skilled blue-collar workers.31

The New Right capitalized upon the general feeling among MARs that

government favors both the rich and the poor to the detriment of the

middle classes. The dominant perception is that "the rich give in to

the demands of the poor, and the middle income people have to pay the

bill."32 The MARs see themselves as ravaged in a "sandwich" attack by

the autocrats from above and the underclass from below.

The New Right is very pragmatic in its attempt to mobilize

middle-class dissent. Richard Viguerie, the main political strategist

of the New Right, believes that conservatives can build a majority

coalition in America. "Social issues" such as pro-family issues (right

to life, gay rights), pornography, gun control, street crime, busing,

drug abuse, capital punishment, and ERA are all issues that are per-

ceived as attractive to the New Right, and that could attract "social

conservatives" from the Democratic party.











Viguerie clearly sees the tide running in favor of conservative

candidates. He claims that as early as 1966 the country exhibited

second thoughts about the Great Society. In 1968 George Wallace

capitalized on conservative sentiment, in 1972 George McGovern, the

candidate of the liberals, received less than 2/5 of the popular vote,

and in 1976 Jimmy Carter, campaigning as a conservative Democrat, de-

feated a field of liberal contenders for the nomination.33

Viguerie cites a study by Dr. Harold Voth, psychiatrist at the

Menninger Foundation, who declared that in his opinion the family unit

was deteriorating in America. Dr. Voth claimed that industrialization,

wars, economic pressure, and working mothers have all combined to de-

prive children of good parenting, that without committed parents there

will be few healthychildren and without healthy children a society will

soon lose its vitality. The New Right cites this and similar studies,

and is committed to working everywhere necessary to protect and pre-

serve the American family as it evolved during the nation's 200-year

history. Viguerie concluded that "each American shares the responsi-

bility to make America great again. We must use whatever talents God

has given us. This can take many directions. Community work, church

activity and political involvement are just a few."34

It is sometimes difficult to notice long-term trends, but it

appears that a conservative shift is occurring in the nation. Electoral

success and the greater visibility of the New Right are two indicators

of this shift. Enunciation of conservative policies even by Democratic

candidates is another indicator. If indeed there is a shift toward

conservativism, what this shift will mean to local governments is a










matter of importance. Ideology, this study contends, has implications

to local government. What these implications are is delineated in this

dissertation.


Influence of Conservative Values on Local Governments

Conservatives are in general agreement on issues such as the role

of government. Conservatives favor a restrictive government. Lack of

unity, however, exists in regard to the emphasis conservatives place upon

certain issues. This chapter has discussed three major themes of con-

servatives: culture, economics, and morality. Each of these perspec-

tives supports the general conservative positions of low taxes and low

expenditures. "Cultural" conservatives are likely to support the posi-

tion of low taxes and low levels of services because of their belief

that public programs are bound to fail. These cultural conservatives,

such as Edward Banfield, James Q. Wilson, and Daniel Moynihan, present

evidence that cultural characteristics are likely to doom any govern-

mental efforts to alleviate or improve conditions of the poor.

Banfield focuses upon class based upon time orientation of in-

dividuals. Individuals seeking immediate gratification were charac-

terized as lower class while individuals who were able to postpone

gratification were said to be of a higher class. Banfield concluded

that lower class individuals could not be helped unless their cultural

predispositions could undergo a transformation.

Moynihan asserted that our current welfare system could not ade-

quately deal with the problems of the inner cities because it did not

deal with the fundamental problem of the black family. Problems in the

black family stemmed from the poor self-image of the often unemployed

black father.










Wilson presented the thesis that government programs may even be

counterproductive, leading to rising expectations and increased frustra-

tion. The common thread connecting the views of Wilson with those of

Banfield and Moynihan is the observation that government programs are

not accomplishing their objective. If this is true, then the percep-

tion is that high levels of public expenditures are either wasteful or

counterproductive.

"Economic" conservatives such as the supply-siders, believe that

government expenditures should be low in order to provide adequate in-

centives to business and to stimulate growth. The Laffer Curve demon-

strated that high rates of taxation could actually reduce the amount of

revenue collected by a polity. Cities are particularly vulnerable to

loss of business to other locations. Levels of taxation may influence

businesses either to stay in the city or to relocate.

New York City is an example of a government following supply-side

philosophies. Having suffered from the flight of business in the 1960s

due to high rates of taxation, New York City put caps on property taxes

and offered generous tax abatement plans to businesses after 1975. This

policy was inaugurated in order to stem the outflow of jobs and busi-

nesses from the city. This conservative economic program had great suc-

cess in revitalizing many parts of downtown Manhattan. A real estate

boom developed in parts of Manhattan in the late 1970s. Unfortunately,

the program has not succeeded in revitalizing the decaying outlying

boroughs of Brooklyn, the Bronx, Queens, and Staten Island.

"Moral" conservatives attack government programs from the perspec-

tive that the dole or welfare increases marital breakups and reduces











iniative. They argue that governments have taken over many of the

responsibilities that previously rested with the family or the church,

and as a result the pillars of our society-family, work, and neighbor-

hood-have been severely undermined.

Summary

This chapter has described resurgent conservative philosophies.

It has provided insight into why public policy differences exist be-

tween people who have different values and perceptions. Theoretical

positions have been explained. In later chapters differences between

conservative and liberal cities will be empirically explores.

Notes

Thomas Dye, Understanding Public Policy (Englewood Cliffs, N.J.:
Prentice Hall, Inc., 1975), p. 199.

Richard P. Nathan, "Field Network Evaluation of the Reagan
Domestic Program," Public Budgeting and Finance 1:4 (Winter 1981), 85.

3George Gilder, Wealth and Poverty (New York: Basic Books, Inc.,
1981), p. 122.

4Ibid., p. 120. 5Ibid., p. 127.

Frances Fox Piven and Richard Cloward, Regulating the Poor:
The Functions of Public Welfare (New York: Random House, 1971), p. 80.

Ibid., p. 81.

Lyman Tower Sargent, Contemporary Political Ideologies: A Com-
parative Analysis, noted in Leon Baradat, Political Ideologies (Engle-
wood Cliffs, N.J.: Prentice-Hall, 1979), p. 32.

Frederick Watkins, The Age of Ideology-Political Thought, 1950
to the Present, noted in Leon Baradat, p. 33.

1David Ingersoll, Communism, Fascism, and Democracy, noted in
Leon Baradat, p. 33.

Paul Sweezy, "Vietnam: Endless War," in Marvin Gottleman and
David Mermelstein, eds., The Failure of American Liberalism (New York:
Vintage Books, 1970), p. 594.






40



12
1Max Mark, Modern Ideologies (New York: St. Martin's Press,
1973), p. 3.
13
3Robert Agger, Daviel Goldrich, and Bert Swanson, The Rulers
and the Ruled (Belmont, Calif.: Wadsworth Publishing Co., 1972), p. 10.
14
1Edward Banfield, The Unheavenly City Revisted (Boston: Little,
Brown & Co., 1970), pp. 57-59.

15Ibid., pp. 61-63 16Ibid., pp. 234-235.

7Lee Rainwater and William Yancey, "The Moynihan Report: Opposi-
tion in the Permanent Government," in Douglas Fox, ed., The New Urban
Politics (Pacific Palisades, Calif.: Goodyear Publishing Co., Inc.,
1972), p. 118.
18
18James Q. Wilson, "The War on Cities," The Public Interest, no.
3 (Spring 1966), p. 31.
19Ibid., p. 32.
20
20Jude Wanniski, The Way the World Works (New York: Simon and
Schuster, 1978), p. 97.
2 Ibid., p. 99.
22
2Milton Friedman and Rose Friedman, Free to Choose (New York:
Avon Books, 1981), p. 261.
23Ibid., p. 47. 24Ibid., p. xx.

2Gilder, 74.
26
26Jack Kemp, An American Renaissance: A Strategy for the 1980's
(New York: Berkley Books, 1979), p. 163.
27
2Erling Jorstad, The Politics of Moralism (Minneapolis: Augs-
bert Publishing House, 1981), p. 101.
28Ibid., p. 102. 29Ibid., p. 90.
30
30Paul M. Weyrich, "Blue Collar or Blue Blood: The New Right
Compared to the Old Right," in Robert Whitaker, ed., The New Right
Papers (New York: St. Martin's Press, 1982), p. 51.
31
Samuel T. Francis, "Message from MARs: The Social Politics of
the New Right," in Robert Whitaker, ed., The New Right Papers (New York:
St. Martin's Press, 1982), p. 67.
32Ibid.
33
3Richard Viguerie, "Ends and Means," in Robert Whitaker, ed.,
The New Right Papers (New York: St. Martin's Press, 1982), p. 33.

34Ibid., p. 26.














CHAPTER 3
LIBERAL PERSPECTIVE


Introduction

Liberalism, like conservativism, stands for a specific group of

ideals and values. It is assumed that these different values will

lead to different policy preferences and different governmental pri-

orities. A review of the philosophies underpinning liberalism pro-

vides some insight into the underlying reasons for the policy differ-

ences. A review of liberal legislation also should provide insight

into how liberal philosophical beliefs are eventually transformed into

law.

Liberals hold a view of the world different from that held by

conservatives. Liberals are generally optimistic about the ability of

man to improve life through human reason. They believe that people are

basically good and that factors which contribute to the realization of

human potential should be carefully nurtured. Liberals believe that

people are rational and that all should have equal opportunity to suc-

ceed in life. Ideals of liberals also hold that all men and women are

fundamentally entitled to equal treatment under the law. This view con-

trasts with the conservative belief that inequities are inevitable.

Under the view of Adam Smith, inequities of wealth will arise but this

is necessary in order to optimize benefit to all.

Today, much confusion surrounds the meaning of the term liberalism.

In the early nineteenth century, liberals concerned themselves with










what they considered to be oppressive obligations to authoritative in-

stitutions such as the state and the church. These institutions were

perceived to restrict individual freedoms and the fulfillment of the

human personality.

"Classical" liberals believed that government could be oppressive

if it was given too much power. These philosophers sought to protect

individuals from the abusive power of the state. Today's liberals,

however, view the abuses of industry as a factor in inhibiting the

standard of living of the masses. By the late nineteenth century many

social critics agreed that the dangers of excesses from the industrial

revolution had become more insidious than the dangers of government.

Today liberals try to use the government or the state in their efforts

to curb the abuses of industry.

C. B. Macpherson claimed that the term "liberal" is a source of

confusion today. He claimed that it means so many things to so many

people that it can easily be misunderstood.1 This confusion that

Macpherson refers to is especially great when it refers to politicians

who benefit from blurring issues. It is also great in periods of ideo-

logical transition such as is the case today.

Labels describing ideological positions may be quite confusing.

Daniel Moynihan was referred to as a neoconservativee" in the mid-

seventies but is referred to today as a "neoliberal." The confusion

does not lie in a change of philosophy by the senator but rather in a

change of reference point. The political center has moved so far to

the right that labels assigned to people like Moynihan are changing.










This chapter reviews liberal thinkers, the evolution of liberal

legislation, other "left of center" positions, and the implications of

liberal perspectives to local governments. As with the discussion of

conservativism, it is hoped that this discussion of liberal views will

provide an understanding of fundamental values and ideals. This under-

standing of the ideals of liberal ideology will assist in evaluating

policy.

Liberal Thinkers

The classical view of liberalism is rooted in the period called

the Age of Enlightenment. This view emphasizes man's rationality and

reasonableness. Reason is stressed rather than tradition. For liberals,

contract replaces status, and individual rights replace the rights of

existing power holders.2 Liberalism also tends to support the rights

of the individual against the forces of the old Establishment. "War on

privilege"was a rallying cry of early liberal philosophers. These

philosophers utilized liberal beliefs as a weapon in the struggle against

privileges of the aristocracy.

Liberal ideals reflected the views of the upper-middle classes

who favored institutional protection of their rights. Liberal insis-

tence on constitutional government, division of powers, and clearly

defined tasks for the executive, legislative, and judicial branches of

government protected the middle classes from arbitrary actions by the

government. This liberal doctrine which protected individual rights

against potential abuses of government served as a major doctrine from

the seventeenth century to the nineteenth century.3










Classical liberal authors from John Locke to John Stuart Mill

questioned privileges of the ruling strata. Locke's concept of civil

society was derived from two closely connected ideas: the social con-

tract and natural law. The social contract was an agreement of the

people made of their own free will. Individuals freely agreed to enter

a civil or political society in order to better secure their rights.

Locke believed that people were equal only in that they had the

same rights under the laws of nature. The ability to defend those rights

varied from individual to individual. Injustices could prevail if one

person struggled with another who was stronger. Right or wrong would

not enter into the picture under this scenario. Locke felt that,in

order to ensure justice, individuals in a community should make a con-

tract among themselves, thereby removing themselves from the state of

nature. A society would be created through this social contract.

Many of Locke's ideals are embraced by today's liberals; other

views of Locke are embraced by today's conservatives. Locke favored a

capitalist economic system, believing it to be the most conducive to

individual freedom. Locke, however, would probably have objected to

the great disparities in property that existed in latter-day capitalism.

Locke clearly believed that property accumulation should be limited. No

person should accumulate so much property that others would be pre-

vented from accumulating the necessities of life.4 Without such a re-

striction, according to Locke, it would be possible for one person,

through control of property, to deny others their identities and even

their ability to be fully human.










Locke assumed that the basic interests of all people in a given

society were the same. This is referred to as the principle of collec-

tive interests. Locke further believed that whatever was beneficial to

the society as a whole would be beneficial to the individual. This led

to the belief that the majority vote is the most important feature of

political decision making.5

Locke's legacy to liberal thought rests on his belief that the

purpose of government is to serve the people. The government's sole

purpose is to maintain and increase individual rights and liberties.

While these ideas are consistent with the values of liberals, they are,

however, also consistent with the values of conservatives.

Jeremy Bentham was in the forefront of a second wave of liberal

thinkers. Bentham believed that people could use reason to improve

their lives. A basic assumption of his was that men seek to achieve

pleasure or happiness. Bentham's personal view maintained that the

greatest end for society would be the maximization of the greatest hap-

piness:

In the public sphere, he [Bentham] considered that the only end
which could be reasonably and acceptably postulated for a society
at large was the maximization of aggregate happiness, the great-
est happiness of the greatest number, and the principle of
utility laid down that actions and institutions were to be judged
by how far they were conducive to this end.6

Bentham did not believe that in a properly ordered society the

long-term interests and happiness of individuals would be in conflict

with the happiness of others in society. Laws would discourage anti-

social behavior, which would have the effect of molding men's de-

sires to seek pleasure in a manner conducive to the general happiness.

Bentham contributed greatly to the development of liberalism as we










know it today. He presented a practical standard by which to measure

the value of particular policies. He set liberalism on a new course

that could significantly improve the conditions of society. Bentham

also provided motivation for many social reforms adopted by England be-

tween 1930 and 1850.8

The most important philosopher of the nineteenth century was

John Stuart Mill. Like Bentham, Mill was a political activist and

spent three years in the House of Commons. He supported the radical

issues of his day such as free education, trade unionism, equal appor-

tionment of parliamentary seats, and repeal of the corn tariffs. Mill

clearly emphasized energetic and original individuality. Emphasis on

spontaneity, character, and originality in human beings typified Mill's

writing. The few experimenters and improvers of society were exalted

as the "salt of the earth."

He [Mill] favoured the active, self-helping type of man required
in a democracy as against the passive type of character, pre-
ferred by the government of a monarchy or aristocracy. Subject-
tion to the will of others and the virtues of self-help and self-
government were incompatible.10

Mill argued that, although democracy was the preferable form of govern-

ment, even democracy could limit individual liberty. For this reason,

freedom of speech and thought should be given absolute protection under

the law. Mill believed that individual freedom was the surest way of

reaching happiness. This position, consistent with the view that the

First Amendment to the Constitution is the most important section of

the document, has been supported by some justices of the United States

Supreme Court.11

Mill's views concerning minority rights are often quoted. His

position on this matter is reflected in the following statement: "If










all mankind minus one were of the opinion, and only one person were of

the contrary opinion, mankind would be no more justified in silencing

that one person than he, if he had the power, would be in silencing

mankind."12 Mill was also a firm believer in freedom of the press. He

felt that in conditions of the free competition of ideas, the right

ideas would prevail. This was further justification for an open, free,

and uninhibited expression of minority opinions.

Mill was the first liberal philosopher to attack laissez-faire

capitalism. His attack against the "enslaving capacity of capitalism"

was so effective that few liberals have supported laissez-faire since

his time.13 Both Bentham and Mill laid a foundation that liberal

philosophers could build upon. Both were interested in political ac-

tivity. Bentham believed that the government should take positive

steps to maximize the happiness of the society. Mill became an activ-

ist, supporting the radical issues of his day. The liberal legacy in

America owes much to Bentham, Mill, and Locke.

Social Welfare Legislation

Philosophers such as Mill, Bentham, and Locke fostered liberal

values and ideals. The ideal of liberals, namely,the concept that

reason will lead to solutions to society's problems, led to social

welfare legislation aimed at alleviating the conditions of the poor

and the working class. Modern social welfare legislation dates back to

the time of Otto von Bismark of Prussia. Bismark feared that class war

could erupt in Germany if the state ignored the problems of the work-

ing classes. He urged "a little more Christian solicitude for the

working man," at a time when Marxist views were gaining in popularity.14










Social welfare legislation was also inaugurated in Great Britain

at the turn of the twentieth century. Liberalism underwent a distinct

transformation at this time. Concern for individual rights and liber-

ties was replaced with concern for social justice for all the people.

This concern for greater justice and equity led to legislation in the

areas of health insurance, pensions, unemployment, and care of school

children.

Liberals, spurred by the writings of John Stuart Mill, began to

move away from the defense of free market competition. The social costs

of defending competition on the basis of individual freedom had become

too great. The industrial revolution in Britain had created massive

poverty and social disruption. In response to these unfavorable condi-

tions, people began to demand that the government provide some protec-

tion for the exploited workers. The idea that a self-regulating mar-

ket would provide the greatest benefit for the entire society simply

collapsed in the face of reality. Liberals began to concern themselves

with social justice and the problems of inequitable distribution of

resources. A "new liberalism" evolved, stressing social reform. Two

conceptions of social reform were

1. The notion of rendering help to individuals and groups that

were materially disadvantaged with respect to their fellow

citizens, and

2. A desire to redesign society in such a manner as to realize

ethical values among all members; to heighten awareness of

communal ends and the changing role of the state.15

Advocates of this brand of liberalism,such as Mill, pushed for

social legislation in Parliament. If industrialization and capitalism










infringed upon the rights of workers to achieve a satisfactory life, then

the belief of these liberals was that the government should step in

to assure workers their rights. Old age pensions were among the first

measures recommended in Britain. The corrollary in the United States to

Britain's old age pensions is our system of social security. It was

argued in Britain that, since pensions were payable to state servants

(soldiers, sailors, postmen, and policemen), they should also be payable

to other workers. Old age pensions would also serve to increase aggre-

gate demand, improve social justice, and create a fuller perception of

the state as the leader of a community. The Nation, an organ of new

liberalism, enthusiastically endorsed the concept of universal pen-

sions.16

Old age pensions successfully expressed the sense of responsi-

bility of the state to provide a minimum standard of living to the

elderly who had contributed to society. The provision of old age pen-

sions is based on the recognition that earnings in old age will be in-

sufficient and that the state should have the responsibility of caring

for its needy. Prominent liberals such as L. T. Hobhouse recognized

that pauperism among the aged was not due to shiftlessness, as the case

may be with the younger poor, but was the normal fate of the poorer

classes.

It also became recognized that unemployment was not the result

of shiftlessness. Unemployment was a cyclical phenomenon in industrial

Britain. Workers would be periodically laid off because of slack de-

mand. This was no fault of their own and not a result of laziness,

irresponsibility, or other character defects. In the early twentieth










century the government of Britain accepted responsibility for the problems

of unemployment. It was recognized that the community must take re-

sponsibility for some of the problems that were foisted upon its mem-

bers.

Care of school children was another issue that attracted a good

deal of attention in Britain. State care of young children was per-

ceived as a viable means for breaking the vicious circle of social dis-

tress characteristic of the lower classes. The Speaker, another liberal

publication, claimed that it was the duty of the state to insist that

every child in elementary school have the physical sustenance required

for development.17 The Nation claimed that parents should supply the

necessary level of sustenance but,in the event of their refusal or in-

ability, it should be supplied by voluntary means or the local govern-

ment.18 A number of motives were involved in advocating the feeding

of school age children. Justice and humanitarianism were major motives;

yet the development of a sense of social solidarity did not play an

unimportant role. Children were viewed as a natural resource indis-

pensable to the well-being of the community. Their development was

regarded as too important to be left entirely to individual parents.

The area of health care is still another area where the govern-

ment of Britain accepted responsibility for the provision of services.

The Insurance Act of 1911 provided national health and unemployment

insurance for all workers. Joint responsibility was assumed by

workers and the state in order to ensure this protection. The British

system of health care is referred to by many in this country as an

example of poor health coverage; yet many consider it better than the











situation in this country, where a person's life savings may be wiped

out by medical costs. The United States has adopted some of Britain's

views toward health care, but,with Medicaid for the poor and Medicare

for the aged,we have not gone as far as Britain or a country such as

Israel in providing free health care to all. In other areas, such as

old age pensions, unemployment insurance, and the feeding of school

children, the United States has closely followed the British initia-

tives.

Many persons credit the social legislation that was passed in the

United States during the Great Depression with saving our economic sys-

tem. There are many radical writers who do not believe that the capi-

talist system should have been saved and that it is doomed to collapse.

They advocate radical changes which would guarantee less exploitation,

greater equality, and greater justice. In this regard they can be per-

ceived as an extension of the liberalism expressed at the turn of the

century in Britain.

Radical Perspectives

The radical perspective is heavily influenced by the works of

Karl Marx and Frederick Engels. Marx's beliefs were founded on the

principle that the capitalist system of production is oppressive and

ultimately doomed to fail. A dictatorship of the proletariat would

emerge as the workers would rise up to replace the bourgeoisie. Even-

tually, the state would "wither away" and an egalitarian society run by

the workers would prevail.

A number of factors were suggested as the cause of the inevitable

downfall of the capitalist state: for example, appropriation of the










"social surplus product" and the "alienation of labor." Social surplus

product refers to the part of production produced by the laboring class

but taken from them by the ruling class.19 Alienation of labor refers

to the cleavage between the producer and the product. Division of labor

and commodity production are said to contribute to this alienation.20

Pride of workmanship is reduced with the newer means of production such

as division of labor. Business cycles represented another part of

Marx's overall conception of capitalism. Capitalist society was per-

ceived to be plagued with periodic cycles of boom and bust. These

cycles were said to be inherent and necessary in order to "rationalize"

production. Less efficient firms will be driven out of business in

periods of business contraction.

Marx claimed that since production is determined for the realiza-

tion of profit rather than for the satisfaction of social need, the

masses are oppressed and cyclical trends of boom and bust occur.

Manuel Castells, a modern-day Marxist, emphasized these problems caused

by the privation of profits coupled with socialization of costs.21

Frederick Engels described how capitalism's influence extended even

into the spatial arrangement of cities. Engels claimed that in the

city of Manchester the working classes lived in the immediate vicinity

of the commercial district. The upper and middle bourgeoisie lived

beyond these quarters, the middle class or middle bourgeoisie, in

Engels' terms, lived in regularly laid out streets, and the upper bour-

geoisielived in remoter villas and gardens.22

In a large sense the living arrangements in twentieth century

America do not differ from the living conditions Engels described










in nineteenth-century Britain. Suburbanization has allowed middle-

and upper-class Americans to escape the much harsher conditions of the

inner cities. Many working-class residents in America today have been

able to escape to the suburbs themselves. The phenomenon of the lower

classes remaining in the center city, however, has not changed.

David Harvey expanded upon Engels' concept of spatial arrange-

ment being determined by economic and cultural relationships. Harvey

differentiated between "physical feelings about the spatial symbolism

which surrounded the individual.23 Cultural conditioning, group learn-

ing, and individual learning were all associated with social space.

Harvey advocated a more egalitarian social structure than the one which

is said to exist in the United States. He claimed that "hidden re-

distributions"lead to greater inequalities than we are led to believe.

A policy of "overkill" in redistribution of wealth is advanced in order

to counterbalance apparent and hidden inequities. Harvey, however, was

not optimistic about the political realities of a campaign to redistri-

bute wealth:

These [mechanics governing distribution] seem to be moving us
toward a state of greater inequality and greater injustice. Un-
less this present trend can be reversed, I feel that almost cer-
tainly we are headed for a period of intense conflict [which may
be violent] within the urban system.24

Harvey maintained that central authorities should allocate re-

sources in such a manner that social justice would be maximized. Terri-

torial justice (a term first coined by Bleddyn Davies in 1958) was also

advocated by Harvey.25 It refers to the equalization of justice between

boundaries, measured by assessment of need; contributions to the common

good; and merit. Actual resource allocations can be compared to










projected allocations based upon these three measures, which, in turn,

will measure the extent of social justice in each of the territories of

a nation.2

Harvey claimed that policies which maximize the prospects for the

least fortunate regions should be devised. Experience with political

realities, such as gerrymandering, indicates that it is unlikely for

resources to be distributed justly. Harvey speculated that in a capi-

talist society, capital is most likely to flow to places where the rate

of return is highest, and unlikely to flow to areas of greatest need.

He found it hardly surprising that the housing market of inner cities

has collapsed and that more investment has occurred in the outer rings

of the cities since investment opportunities are likely to be more

profitable in these areas.

Harvey concluded that in order to improve the quality of life in

urban areas, structural changes must be made in our society. Produced

and controlled scarcity is one of the factors that Harvey claimed pro-

duces the exploitation of the many by the few.

If it is accepted that the maintenance of scarcity is essential
for the functioning of the market system, then it follows that
deprivation, appropriation and exploitation are also necessary
concomitants of the market system. In a spatial system this im-
plies that there will be a series of appropriative movements be-
tween territories which leads some territories to exploit and
some to be exploited. This phenomenon is most clearly present
in urban systems.27

Michael Harrington concurred with both Harvey and Engels that

structural conditions within the capitalist society have produced tremen-

dous inequalities in our system and led to the exploitation of the many

by the few. Harrington claimed that the American political and economic

system must be made accountable for laying waste to the urban areas of










America. He attributed the decline of our cities today to blind

obedience to corporate priorities, the market, and technology. That

human costs of market decisions are rarely considered he saw as a defect

of the system:

The market analysis of the urban crisis obscures both the real
costs and the social and economic consequences of the process it
describes. Not so incidentally, this flaw is in the interest of
the rich and powerful and to the detriment of the most vulnerable
people in the nation. In this theory, it is tacitly assumed that
one must, in the name of rationalization and efficiency, let the
market forces do their work even if the result is havoc for
millions and for entire communities.28

Harrington claimed that abandoning neighborhoods in cities such as

New York, Detroit, Cleveland, and St. Louis was one way of getting rid

of old plants and investing in new areas. Whether or not this is the

best method of modernizing an economy is questioned, since the social

cost of disinvestment is often ignored. Harrington believed that major

corporations should bear some of the social expenses if they are to re-

locate their plants. He claimed that they are able to walk out on their

employees and their former city without so much as waving goodbye.

Harrington completely rejected the validity of the market theory of

development. These theories are said to represent a remarkable alibi

which absolves those involved from responsibility for economic disasters.

Harrington postulated that the federal government played a major

role in creating the economic problems that plague cities today. He

cited favorable tax treatment offered to home mortgages, huge expendi-

tures for highways, investment tax credits for businesses, and inequi-

table distribution of federal money back to cities as examples of federal

policies which had a negative effect on cities. Harrington also viewed

New Federalism as penalizing the large cities. Nixon's plan to turn











money back to the states and localities to use at their discretion,

rather than to earmark the funds to mandated programs,resulted in larger

proportions of federal money going to small and moderately sized cities

and smaller proportions going to the largest cities. Harrington esti-

mated that, between 1968 and 1975, the share of money going to large

cities declined by 20 percent.29 Politically, this is understandable

since many of the largest cities are Democratic and unlikely to benefit

from Republican policies. Harrington concluded that his proposition

about the federal government fueling urban decline was supported by the

facts:

The destruction of great American cities was not the result of
economic forces acting autonomously and independently of the
human will. Rather these forces operated in, and were signifi-
cantly shaped by, an environment created by political decisions
which were systematically and coherently thougthlessas far as
social cost and consequence were concerned.30

Others have discussed the structural problems alluded to by Harvey,

Marx, and Engels. Manuel Castells, a prominent structuralistt," de-

scribed the problems of our cities. Castells defined the crisis of

declining services and deteriorating infrastructure in American cities

as a manifestation of a larger economic crisis in our system. He attri-

buted the larger economic crisis to the socialization of costs and

privatization of profits that occur in our capitalist form of govern-

ment. Castells cited the following basic structural contradictions in

our structure:3

1. The contradiction between the growing need for public ser-

vices in a system of socialized consumption and the increas-

ing privatization of profits











2. The contradiction between the growth of local governments'

responsibilities and their inability to deal with the problems

either financially or institutionally

3. The contradiction between the need to maintain central func-

tions and the urban sprawl of metropolitan areas

4. The contradiction between the concentration of surplus popula-

tions in the center cities and the lack of mechanism of inte-

gration in the center city.

Castells maintained that these contradictions threatened the very

basis of urban existence. They represented a growing breakdown of the

means of collective consumption. This breakdown could be witnessed in

the destruction of portions of cities such as in Baltimore, Boston, and

St. Louis. The South Bronx of New York City was cited as the most

famous example of the decay that threatens our large cities. In the

South Bronx the process of abandonment and deterioration of real estate

values had encouraged the setting of fires in order to collect money

from insurance companies. Castells claimed that there were 12,300

fires in the South Bronx in 1974, approximately 10 every night. The

going rate paid to children to start the fires was incredibly only
32
three to ten dollars.32 This statistic in itself is indicative of the

chaos that ran rampant in New York during the seventies. The South

Bronx represented the most famous but not the only area of New York in

turmoil. Brownsville and Bushwick in Brooklyn were also laid to waste

in the seventies.

Castells speculated that the breakdown of social order had its

roots in the "ideological experiences of oppression" and the "social










33
structure of exploitation" that was rampant in our cities. The ex-

ploited vented their frustrations upon the support systems of the inner

cities in the seventies. Street crime and riots were the most signifi-

cant factors in the breakdown of order in the cities. This breakdown

of social order also had a major impact on the management of cities.

Castells maintained that the social breakdown contributed to both the

failure of the cities to manage their affairs and to the urban fiscal

crisis. The fiscal crisis is,in Castells view, the result of the

socialization of costs and privatization of profits that occurs in our

system. Castells concluded that the fiscal crises of municipalities

could eventually threaten the legitimacy of local governments and that

policies must be implemented to overcome the crises. In Castells' view

these policies would be the result of class conflict within the frame-

work of our social structure. The radical perspective can be perceived

as an extension of liberalism's concern for social justice and equality.

Radicals, however, do not believe that the legislation aimed at alleviat-

ing injustices went far enough. They believe that New Deal legislation

in the United States probably saved the capitalist economic system;

however, they do not believe that the system was worth saving. They

contend that significant changes are needed in order to correct the

structural contradictions manifested in the system -changes they claim

would bring about more social justice and equality.

In the United States radical intellectuals have not been very

successful in fundamentally altering the system. Workers in America

have struggled and achieved a relatively high standard of living. The

exploitation and poverty noted by Marx and Engels when describing the










plight of the majority of industrial workers in England does not

apply to industrial workers in America today. Revolutionary movements

have in fact been more successful in agrarian societies than in the

industrial society where Marx predicted the proletariat would seize con-

trol. China, Vietnam, Cuba, Ethiopia, Nicaragua, Angola, and Afgani-

stan are examples of agricultural societies that have accepted collec-

tive forms of government.

There is evidence in the United States that the proletariat, or

workers, are not as radical as others, such as intellectuals or students.

In the sixties the construction workers, or "hard hats," symbolized con-

servative thought. In 1972 large numbers of workers abandoned their

traditional political home (the Democratic party) because the standard

bearer was perceived to be "too liberal." In 1980 the proletariat, or

working class, delivered a resounding victory to the conservative can-

didate, Ronald Reagan. Workers in America today have a vested interest

in the continued prosperity of the nation. They have attained a decent

standard of living through many years of struggle with management.

Sweatshops in New York and the Ludlow massacre in Colorado are two

examples indicating that the struggle has not been easy. It appears

that,in response to a shift to the right by many workers, liberals are

modifying their public positions. Neoliberalism refers to this shift

to the right.


Neoliberal Positions

A new group of Democrats who claim to be the political heirs of

John F. Kennedy are gaining visibility in America today. This group has

only recently been defined. They are represented by senators such










as Bill Bradley of New Jersey, Gary Hart of Colorado, Paul Tsongas of

Massachusetts, and Max Baucus of Montana; congressmen such as Timothy

Wirth of Colorado, Richard Gephardt of St. Louis, James Florio of New

Jersey, Leon Panetta of Monterey, California, Albert Gore of Tennessee,

and Phillip Sharp of Indiana; governors such as Jim Hunt of North

Carolina and Bruce Babbitt of Arizona; communicators such as economist

Lestor Thurow of MIT, Morton Kondracke of The New Republic, James

Fallows of the Atlantic Monthly, Charles Peters of The Washington

Monthly; and even bankers such as Felix Rohatyn.34

What the neoliberals represent has only recently been defined.

Neoliberals would like to free themselves of the albatross of dis-

credited social programs of the sixties. They would, however, like to

retain an allegiance to the ideals of the sixties-compassion for the

downtrodden, justice, fair play, and liberal ideals. Neoliberals claim

that they simply would like to practice pragmatic politics and that

they will repackage the politics of good intentions in a manner that

does not disrupt society. A closer inspection of the platform and

agenda of neoliberals reveals that in many respects their positions are

not much different from the positions advocated by the New Right.

Neoliberals wish to limit the role of government but do not call

for the extent of contraction desired by the Right. Congressman

Richard Gephardt claimed that government has a duty to see that people

are not "crushed by the economic forces of the free market," but he

asserted that government has no business being in other areas, such as
health care.35
health care.










In terms of economic posture, neoliberals do not differ much

from neoconservatives-both stress tax incentives, economic growth, and

the encouragement of the entrepreneurial spirit. According to Charles

Peters of The Washington Monthly,

ninety percent of our bright young kids of the Seventies have
gone to law school or business school. Instead of going into
something that would create a new enterprise that would make the
country move again, they are going into whoring. I don't want
to lose to the Japanese.36

This nationalistic appeal is heard with equal clarity from the

Right. Neoliberals, however, differ from neoconservatives in terms of

priorities. Neoliberal emphasis is almost exclusively on economic

issues. Neoconservatives, many of them sociologists, insist that

America's problems stem from a cultural breakdown. Economic problems

are only a manifestation of the deeper cultural problems of the nation,

in the view of these neoconservatives.

Neoliberals recognize the need for more government-business

cooperation. The Japanese concept of teamwork explained in the recent

best seller Theory Z is extolled by neoliberals.37 Emphasis is also

placed on research and development and long-term rather than short-

term solutions to our economic problems. Fear that the traditional

excellence of the United States is slipping is another thesis of the

neoliberals. Neoliberals view traditional liberals such as Kennedy and

Mondale as "paradigms of tired thinking," and view themselves as repre-

senting the new direction of liberalism in America. A neoliberal agenda

emphasizes the following:

1) Compulsory National Service
2) Negative Income Tax
3) Central Economic Planning
4) Hi-Tech Industrialization










5) Better Defense 38
6) Cooperative Regionalism.


Implications of Ideology to Local Governments

Does political ideology have a marked affect upon the budgetary

behavior and socioeconomic conditions of cities? This is a question

that will be investigated in greater detail in the following chapters.

Some make the argument that there is no liberal or conservative method

of sweeping a street, teaching children, controlling crime, or budget-

ing. Whether differences between liberal and conservative cities exist

in regard to budgeting will be determined. Intuitively, one would expect

policies in conservative cities such as Dallas and Houston to be dis-

tinctly different from policies in liberal cities such as New York and

Boston. This may be attributed to the fact that we expect leaders in

conservative cities to rely upon the free market to a greater extent

than leaders in liberal cities. One would expect, a priori, liberal

cities to be characterized by high per capital expenditures, high borrow-

ing, and high intergovernmental revenue. Presumably, these revenues

and expenditures would be necessary and would be supported by the citi-

zens in order to fund the expansive type of government likely to be

encouraged by liberal philosophies.


Summary

This chapter has delineated basic philosophical positions of the

liberal political ideology. It has also discussed the historical evolu-

tion of liberal legislation. Both of these discussions are aimed at pro-

viding theoretical insights into why policy differences may exist be-

tween liberal and conservative cities. These differences will be empiri-

cally explored in later chapters.











The discussion of the rise of the neoliberals demonstrates that

ideology is indeed a matter of interest today. Just as the rise of

the New Right describes ideological foment, the rise of neoliberals

represents the Democratic party's response to the electoral success of

conservative candidates. Both of these movements indicate that the

agenda of the nation has shifted to the right. If one believes the

assumption that a shift in ideological values of the nation is occurring,

one should also be concerned with the consequences of this shift. This

study will evaluate the association between political ideology and

specific public policy. Through this analysis we can begin to assess

the policy implications of shifts in value priorities or shifts in

ideologies. In the following chapters the association between political

ideology and budgetary policy are empirically investigated. Whether

different budgeting policies exist between liberal and conservative

cities is explored. Specific categories of revenues and expenditures

are compared between liberal and conservative cities. The extent of

difference in these categories is empirically identified. The discus-

sion of New Right positions provides an indication of the salience of

the conservative position today. There was a time when conservative

ideology in America was considered dead. The election of 1980 and

other elections, however, demonstrated that the Right has the ability

to draw support from a broad spectrum of the electorate. Working-

class support of conservative Republicans particularly troubles Demo-

crats accustomed to the support of rank and file labor. Frustrations

of coal miners, truckers, and farmers have been exploited by the New

Right anxious to build a durable coalition.











Notes

C. B. Macpherson, "The False Roots of Western Democracy," in
Fred R. Dallmayr, ed., From Contract to Community (New York: Marcel
Dekker, Inc., 1978), p. 17.
E. K. Bramsted and K. J. Melhuish, eds., Western Liberalism
(London: The Chaucer Press, 1978), p. xvii.

Ibid., p. xvii.

4Leon Baradat, Political Ideologies (Englewood Cliffs, N.J.:
Prentice-Hall, Inc., 1979), p. 61.

5bid., p. 62.

Bramsted and Melhuish, p. 20.

Baradat, p. 94.
81bid., p. 94 9bid., p. 96.

10Bramsted and Melhuish, p. 249.
11 12
lBaradat, p. 97. 1Bramsted and Melhuish, p. 79.

13Baradat, p. 97.
14
1Asa Briggs, "The Welfare State in Historical Perspective," in Mayer
Zald, ed., Social Welfare Institutions (New York: John Wiley & Sons),
p. 62.

15Michael Freeden, The New Liberalism: An Ideology of Social
Reform (Oxford University Press, 1978), p. 20.

16"Pensions and the Poor Law," Nation, 16.3.1907, quoted in
Freeden, p. 203.

17Freeden, p. 222. 18Ibid.
19
1Ernest Mandel, An Introduction to Marxist Economic Theory
(New York: Pathfinder Press, 1979), p. 9.
20Ibid., p. 13.

2Manuel Castells, The Economic Crisis and American Society
(Princeton, N.J.: Princeton University Press, 1978).
22
2Frederick Engels, The Condition of the English Working Class
in 1844 (London: 1962 Edition), pp. 46-47.











23David Harvey, Social Justice and the City (Baltimore:
Hopkins University Press, 1975), p. 34.


241bid., p. 95.

27Ibid., p. 119.


25Ibid., p. 101.


26Ibid., p. 101.


28Michael Harrington, Decade of Decision (New York:
Schuster, 1950), p. 186.


29Ibid., p. 199.


30Ibid., p. 203.


31Manuel Castells, The Economic Crisis and American Society
(Princeton, N.J.: Princeton University Press, 1980), p. 200.


32Ibid., p. 208.


33Ibid., p. 214.


34Randall Rothenberg, "The Neoliberal Club," Esquire, February
1982, p. 38.


35Ibid., p. 44.


36Ibid, p. 45.


37Wiliam G. Ouchi, Theory Z (New York: Avon Books, 1981).

38Rothenberg, p. 45.


Johns


Simon and














CHAPTER 4
NEXUS BETWEEN IDEOLOGY AND SOCIOECONOMIC VARIABLES


Introduction

The association between political ideology of cities and the

experience of their socioeconomic variables is explored in this chapter.

Causality is not determined, only distinctions based upon the difference

of means between liberal and conservative cities. A number of socio-

economic variables are compared employing the difference of means, t

tests. The overall health or economic viability of cities is also com-

pared utilizing bond ratings and changes in bond ratings as surrogate

measures of municipal health. Prior to the investigation of socio-

economic distinctions between liberal and conservative cities, the

development of the concept of ideology is discussed.


Development of Concept of Ideology

The term ideology was first coined by the French scholar Destutt

de Tracy (1754-36), who used the term in his study of the Age of Enlight-

enment.1 Destutt de Tracy viewed ideology as part of a newly conceived

science of ideas, which was to be the basis of a new social order. At

the turn of the eighteenth century, Destutte de Tracy and his followers

enjoyed great popularity. The influence of the movement was short lived,

however. Napoleon dismissed the leaders of the movement as a group of

tiresome theorists. In order to establish a strong central state,

Napoleon decided to restore the influence of the Church rather than to

support the influence of the "science of new ideas."2


M










Ideology was little heard of after the failure of de Tracy to

reform France in the late eighteenth century. Marx resurrected the

term, however, in the mid-nineteenth century. His earliest systematic

use of the term occurs in The German Ideology, which was co-authored

with Frederick Engels. Marx and Engels viewed ideology primarily as a

fabrication used by one group of people to justify their place in

society. The idealized use of the term as a science for the improve-

ment of society had been abandoned. In the view of Marx and Engels,

ideology was a concept that worked to benefit the ruling class by

guiding the programs of the existing class structure. An ideology would

cease to exist only when it no longer met the demands of its population.

At that time a new ideology favoring the interests of a different class

would emerge. Marx's Theses on Feuerbach presents a rough outline of

his definitive work on ideology.3 In this work, Marx emphasized the

practical nature of thought and denied the importance of unpractical

thinking. Marx maintained that only thought could change the world-

all else was trivial. Only by changing the world, Marx believed, could

men destroy the society that alienated them from themselves. Aliena-

tion is a vital component of what Marx termed "false consciousness."

Since in contemporary societies all that is naturally human is alienated

from man, alienation of thought naturally follows. Alienation of

thought leads thinkers to believe their works to be true; yet this is

false consciousness or the individual's mistaken belief.4

Marx observed that alienation of social thought was centered on

the state instead of the real basis of alienation which was property.

Political thought mistakenly centered upon state institutions rather










than on problems arising out of private ownership of property. This

political orientation was further evidence of the false consciousness

of thinkers and the extent of their alienation. Only if thinking were

directed at the real basis of society (property) would thought cease

to be alienated. False consciousness was said by Marx to explain the

errors of previous thinkers and to provide an explanation of how socie-

ties are ruled:

The false consciousness of a ruling class, its ideology, guides
it according to the direction of its own interest. The ideology
of the bourgeoisie, for example, is the programme of bourgeois
expansion and power. The exponent in this programme is the polit-
ical economist, who tells the bourgeois how to expand his capital
at the fastest possible rate. On Marx's understanding this
programming is unobjectionable, until the economic and social
system which is guided by the bourgeois ideology stops expanding.
When the forms of material production are no longer able to
meet the demands of an expanding population, the social system
is bound to be overthrown. But before this occurs, a new ideology,
one setting forth a programme5favourable to the interests of a
different class, will emerge.

In short, Marx viewed ideology as an idealized justification for

ruling-class control, which meant control of all means of production-

goods as well as ideas. New ideologies would take hold only when mate-

rial production was no longer able to meet the demands of the population.

In this manner the world would follow the history of material change,

not the logic of thought, as Hegel claimed. Marx was critical of all

philosophy and what he termed the delusions of absolute idealism.

A prerequisite for Marx's "socialist science" (which would be led by

the proletariat) would be what Marx termed an "unmasking of human self

alienation."6 Marx's theory of ideology was assigned this task. Marx

maintained that once the unmasking process had been accomplished, all

would be clear. He stated that "it is the task of history, therefore,










once the other world of truth has vanished [false consciousness],to

establish the truth of this world."7

Karl Mannheim, another important contributor to the development

of the concept of ideology, was in agreement with Marx in that he be-

lieved all thinking was socially determined. He believed, however,

that Marx's writings were no more free from ideology (false conscious-

ness) than the works Marx attacked. Marx, he claimed, used false con-

sciousness to discredit opponents but did not apply the same criterion

to his own works.

Mannheim claimed that men's thoughts are in accordance with their

class positions, and that the task of intellectual criticism is to

understand and benefit from the ramifications of this insight. Mann-

heim concluded that no idea was strictly congruent with reality, all

ideas being more or less pathological expressions of social discontent.

He distinguished between what he termed utopies and ideologies, calling

the more incongruous thoughts, the ones which are so incongruous
that they prevent the thinker from acting effectively, ideologies.
The more effective ones, the ones which enable men to break
through the status quo and satisfy the needs of the thinker, are
called utopias. Mannheim admits that a little insecurity and
maladjustment in a class is to be expected, for then the class
concerned will express its grievance in the form of what he calls
a utopia and so overcome its problems.8

Mannheim feared that unmasking false consciousness might prevent

utopian responses to pressing problems. When this unmasking occurred,

groups shorn of their utopia might react to the situation not by refer-

ence to their true position, but by taking refuge in what was perceived

as an intractable pathological response or ideology.

Both Mannheim and Marx laid the foundation for an understanding

of ideology. Since the time of Marx, ideology has been utilized as a










means of describing class conflict and philosophical beliefs. It also

has been viewed as a means of studying how ruling classes have justified

their positions. Perhaps most important, ideology provides a means of

investigating historical change.

Dialectical View of Ideology

Ideology has been utilized as a means of understanding large

changes in the history of man. Marx's concept of dialectical material-

ism is fundamental to the Marxian understanding of history. Ideology

plays a large part in this dialectic, or change, that is ever occur-

ring. The concept of the dialectic was borrowed by Marx from George

Hegel. Hegel developed a theory of history based upon the concept of

change in which the world was progressing toward an ideal or goal that

was predetermined by God.9 According to Hegel, people should not try

to adjust the progress of history-which he viewed as beyond their

power and predetermined by God. People, he wrote, would find truth

only when they accepted their place in history, or in the Devine plan.

Marx was not in accord with this view of history but adopted Hegel's

idea of the dialectic process.

Hegel believed that the dialectic was a devinely created
force by which the Idea [history] was to unfold. He believed that
any reality is two things. It is itself, and it is part of what
it is becoming. Thus the only consistency Hegel saw was change
itself. He called this the power of the negative. To Hegel
history was simply the process of change brought on by struggle.
In this process no truth was ever lost since today's reality
would become part of a more perfect truth tomorrow. 0

Marx changed Hegel's dialectic in order to suit his own view of

historical progress. While Hegel argued that the dialectic was a

struggle between devinely inspired ideas which culminated in change,










Marx postulated that the dialectic was a struggle among worldly (not

Godly) interests. Marx, therefore, is said to have "stood Hegelism

upon its head":

Marx believed that the human conflict was caused by social class
differences. In addition, he held that the struggle that occurred
at the end of one historical era and led to the dawn of a new
one was a struggle between opposing social classes. Further, he
believed that humanity had passed through four historical stages
and was about to enter its fifth and final era.11

The first era of human history was said by Marx to be based on

primitive communism where no occupational specialization or division of

labor existed. As specializations developed, they led to strife and

conflict, with empire resulting from the strife as the second dominant

political system. Slavery was said to have been the economic system

that supported the political system of empire. Feudalism emerged as the

political-economic system toppling the old system of empire. Bourgeois

democracies were the basis of the political systems replacing feudalism.

Capitalism was the economic system supporting the bourgeois democra-

cies. The proletariat, or the factory workers, were to be the vehicle

for the creation of the fourth historical era. This fourth era would

emerge as the end product of the final dialectical struggle-all classes

but the proletariat would be eliminated; the source of all human strife

would disappear; and a new, classless society holding its goods in

common would emerge. In this society all people would find peace and

happiness.

Whether one adheres to the dialectical view of history or not,

it is fairly clear that some ideological change appears be be occurring

in America today. For the purpose of this study, the impact of this

change on local governments is of primary concern and will be evaluated.










First, however, two procedures must be implemented: (1) ideology must

be operationalized and transformed from a theoretical concept into an

objective value, and (2) cities must be characterized according to

ideology so that their behavior can be contrasted.


Empirically Characterizing Cities by Ideology

The twenty largest cities in the United States were typologized as

either liberal or conservative12 by use of rankings by the Americans

for Democratic Action (ADA). These ADA rankings were assumed to repre-

sent an independent, nonpartisan measure of ideology. The ADA was

organized in 1947 by a group of political leaders, trade union officials,

and university people. Its purpose was to serve as a bulwark of liberal

anticommunism,13 and it is dedicated to work for the nomination and

election of liberal candidates to public office, regardless of party

label. The Americans for Democratic Action is established to "seek out,

propose and support candidates who stand for regorous liberal programs."14

As stated in the introduction, a number of assumptions were made

in typologizing cities. Among them are (1) congressmen and congress-

women of a particular municipality are representative of the political,

cultural, or political ideology of that municipality, and (2) Americans

for Democratic Action can accurately identify the ideological posture

of legislators.

Evidence exists that ADA scores accurately reflect the ideology

of the members of Congress and correlate highly with other indexes

that claim to describe ideology. A strong negative correlation exists

between the ADA measure and conservative measures of ideology. Those










with high scores on the ADA scale rank low on the conservative scale

and vice versa. It is assumed that the key votes chosen by the ADA

represent policies with an ideological frame of reference.

Through ADA rankings, a measure of ideological preference for

each city was attained. For example, New York City is represented in

the House by districts 7-22. The representative from each of these

districts is ranked by the ADA with regard to his or her correspondence

with liberal positions on certain values. By averaging the scores of

all of New York's representatives, an ADA score for the entire city can

be calculated. This procedure was carried out for the other cities

and arrayed from highest to lowest. The highest cities on the ADA rank-

ing were designated "liberal" cities while the lowest cities were desig-

nated "conservative" cities. Appendix A shows ADA rankings for each

district in the cities under review; Table 4-1 arrays the average ADA

ranking for all of the cities. The cities were dichotomized into two

categories in Table 4-1. the cities with the highest ADA scores

(Baltimore, San Francisco, Los Angeles, New York, Cleveland, Memphis,

Boston, Detroit, Milwaukee, Chicago, Philadelphia, and San Jose) were

characterized as liberal; the others were characterized as conserva-

tive. The majority of the conservative cities were located in the sun-

belt. Los Angeles and Memphis were the only liberal sunbelt cities.

Columbus and Indianapolis were conservative cities not located in the

sunbelt. The salience of political ideology relative to region is dis-

cussed below.










Table 4-1

Ideological Ranking of Cities by ADA Scores


City


ADA Score


Baltimore

San Francisco

Los Angeles

New York

Cleveland

Memphis

Boston

Detroit

Milwaukee

Chicago

Philadelphia

San Jose


Liberal


Houston

San Diego

San Antonio

Indianapolis

New Orleans

Dallas

Columbus

Phoenix


Conservative










Ideological Versus Regional Salience

Kirkpatrick Sale's Power Shift stirred a great deal of attention

in discussing the growth of the sunbelt and the decline of the snowbelt.

Sale's contention, simply stated, was that the sunbelt was experiencing

growth while the snowbelt or frostbelt was in a state of decline. Wat-

kins and Perry disputed some of Sale's contentions. They claimed that

there was poverty in both areas but that the response to the poverty

differed dramatically between the two areas. In the north, poverty was

addressed through governmental assistance and was a source of fiscal

crisis in cities such as New York. In the south, poverty was a source

of cheap labor. Poverty, measured by the Bureau of Labor Statistics,

was greater in the south; yet the poor of the south were much more

likely to be working-for a subsistence wage-and paying taxes, while
15
the northern poor were much more likely to be unemployed. Culture

or political ideology may begin to explain this phenomenon. Implicit

in Watkins and Perry's analysis is the contention that regional differ-

ences may be linked to policies toward the poor.

There is another dynamic at work beside sunshine. Thomas Dye

tested the relationship between economic growth and average annual

daily temperature. Dye found that the sunbelt phenomenon was grossly

exaggerated. Warmth and sunshine in and of themselves were not very

good predictors of economic growth.6

Other studies have singled out different conditions as prerequi-

sites for growth. Robert T. Holt and John E. Turner acknowledged the

importance of political conditions.17 They viewed the attitude of the

government as a crucial determinant of economic growth. The present study










focuses upon political ideology and investigates the linkage between

political views (measured by votes in Congress) and various socioeconomic

measures of growth and general health. As Holt and Turner, and Watkins

and Perry, infer, political conditions may be very relevant influences

on social and economic conditions. In the present study the socioeconomic

health of cities is explored by an investigation of bond ratings and

the performance of individual socioeconomic variables.

Bond Ratings, 1981

The economic health of a city is reflected in the bond ratings of

the municipality. Ratings are initially determined by investment ser-

vices such as Moody's or Standard and Poors. After evaluating the pros-

pects of repayment and the risks of default, bonds are given a rating

ranging from Aaa (best quality) to C (lowest rated class), While bonds

are rated by investment houses, the market eventually determines the

worth of the security. If a bond has been rated too low, interest rates

will be very attractive to investors wishing to reap a good return on a

secure investment. These investors will buy the bond, increasing the

demand and making the security sell at a premium. Future issues will

be floated at a lower interest rate reflecting this market interest.

If, on the other hand, the bond has been rated too high, lack of inter-

est will force the price of the bond down, increasing the rate of in-

terest until it eventually finds buyers. Moody's ratings for municipal

bonds are summarized as follows:

Ass Best quality

Aa High quality

A Upper medium grade











Ba Speculative

B Lacks characteristics of desirable investment

Caa Poor standing

Ca Speculative in a high degree

C Lowest rated class.

Table 4-2 describes the bond ratings for liberal and conservative cities

over a period of twenty years.

The chi-square test was employed to determine whether statisti-

cally significant differences existed between the bond ratings of

liberal and conservative cities. Table 4-3 lists the latest obtained

and expected frequencies of bond rating in liberal and conservative

cities.

Since the expected frequencies of cells were less than 10, Yate's

correction had to be employed. No statistically significant differences

between bond ratings of liberal and conservative cities were found to

exist at the .01 or .05 level of confidence. Chi-square value calcula-

tions are shown in Appendix B.

The bond rating data indicate that in 1981 investors had more

confidence that conservative cities would repay their obligations than

they had that liberal cities would do so. The economic health of con-

servative cities appeared to be sounder in 1981, but statistical dif-

ferences were not found at the .01 or .05 levels.

Changes in Bond Ratings Over Time

The trend of bond ratings over the past twenty years was also in-

vestigated. A statistically significant difference between trends in

liberal and conservative cities was discovered at the .05 level of confi-

dence. More of the conservative cities improved ratings between 1961










Table 4-2

Municipal Bond Ratings, 1961 and 1981


City 1981 Rating 1961 Rating

Liberal Cities

Baltimore A A
San Francisco Aa Aa
Los Angeles Aaa Aa
New York B A
Cleveland Caa Aa
Memphis Aa Aa
Boston Baa A
Detroit Ba A
Milwaukee Aa Aaa
Chicago A A
Philadelphia Baa A
San Jose Aa Aa

Conservative Cities

Houston Aaa A
San Diego Aa A
San Antonia Aa A
Indianapolis Aaa Aaa
New Orleans A A
Dallas Aaa A
Columbus Aa Aa
Phoenix Aa A


Source: Municipal Year Book 1981 (Washington, D.C.: Inter-
national City Management Association, 1981), pp. 12-44; John Moody,
Moody's Municipal and Government Manual (London: Moody's Investors
Service, Ltd., 1961).










and 1981. Table 4-4 shows the obtained and expected frequencies of

changes in bond ratings.


Bond Ratings, 1981:
A or above


Table 4-3

Speculative and Upper Grade
B or below


Liberal
Cities



Conservative
Cities


Table 4-4

Changes in Bond Ratings:

Improve


Liberal
Cities



Conservative
Cities


6 6


(9) (3)
7 5



(6) (2)
8 0


1961-81

Worsen










Five conservative cities improved their bond ratings while no conserva-

tive city had a worsening of its rating. One liberal city improved its

rating while in six liberal cities the ratings fell. Appendix B com-

putes the chi-square values for the 2 x 2 table described above. We

can infer from Table 4-4, at a 95 percent level of confidence,that be-

tween 1961 and 1981 conservative cities were more likely to experience

improvements in their economic viability, expressed by bond ratings.

This discussion of bond ratings describes the bond market's evalua-

tion of the cities' fortunes. Cities were evaluated in terms of inves-

tor confidence in both economic well-being and their ability to repay

loans. Individual socioeconomic trends were lost in this analysis. The

following discussion investigates specific socioeconomic indicators of

economic well-being in liberal and conservative cities.


Socioeconomic Indicators

Specific socioeconomic indicators of cities were investigated.

The following indicators were compared between liberal and conservative

cities:

1. Percent white population

2. Percent elderly population

3. Percent of population with four years of high school or

more education

4. Percent of population below the poverty level

5. Median income

6. Serious crimes per 100,000 people.

These socioeconomic indicators were compared both over time and at one

point in time. Data from the 1970 census were the latest available data.










Appendix C presents the performance on these socioeconomic vari-

ables of all liberal and conservative cities. In Appendix D the stan-

dard error of estimate is computed, a figure that is necessary for the

calculation of t scores used in determining significant differences

between means. Table 4-5 summarizes the differences between liberal

and conservative cities for each of the variables listed above. The

data do not support the contention that in 1970 liberal cities were in a

worse condition than conservative cities. No statistically signifi-

cant difference was found between liberal and conservative cities for

any other variable.

Upon careful investigation of the data, however, it was dis-

covered that one city in each group was an anomoly. San Jose (in the

liberal group) and New Orleans (in the conservative group) exhibited

behavior which was different from their group. In general, liberal

cities experienced characteristics of decline, but San Jose experi-

enced robust growth. In terms of population change, the percent white

population, percent elderly population, change in percent elderly popu-

lation, change in total employment, education, poverty, value added by

manufacturing, and retail sales, San Jose'e behavior was closer to the

behavior of conservative cities than to the behavior of liberal cities.

A similar situation existed with respect to New Orleans. While

most conservative cities experienced characteristics of growth, New

Orleans' data were characteristic of decline. New Orleans was an

outlier of the conservative group in terms of population growth, per-

cent white population, change in white population, elderly population,

change in elderly population, change in total employment, change in









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value added by manufacturing, change in retail sales, change in median

family income, education, and poverty.

It has always been the case that unexpected findings may be of

great value. Such is the case with respect to San Jose and New Orleans.

While San Jose was determined to be a liberal city, based upon its vot-

ing record, it has experienced tremendous economic growth. New Orleans'

voting record firmly established it within the conservative group; yet

the city had not experienced any of the growth associated with conser-

vative cities. An explanation of why these two cities are anomolies is

beyond the scope of this study. This study only identifies the situa-

tion and serves as a source of future research.

Larry Mayer of the University of Pennsylvania stated in his lec-

tures at the Inter-University Consortium of Political Science Research

(ICPSR), in 1978, that in order to get the least distorted picture from

data, it is necessary to omit extreme outliers. By dropping these

extreme outliers, a better picture of the swarm,or majority,of the data

is obtained. This was done in regard to the extreme outliers San Jose

and New Orleans. Table 4-6 compares variables after the two outliers

(San Jose and New Orleans) were omitted.

When the cities of San Jose and New Orleans were omitted from

analysis, greater differences between the liberal and conservative

cities were discovered. In contrast to the previous analysis, when

only a difference between the elderly populations of the liberal and

conservative cities was discovered at the .05 level of confidence, dif-

ferences were discovered at the .01 level of confidence for both the

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Even greater population differences were discovered when changes

in the socioeconomic conditions of the cities were investigated. Growth

in the following variables were delineated:

1. Size of city

2. Minority composition of city

3. Elderly composition of city

4. Median income

5. Total employment

6. Value added by manufacturing

7. Total retail sales.

These variables describe changes in both demographic and economic condi-

tions. It is assumed that increases in the proportion of minority el-

derly populations, as well as reductions in the absolute size of cities,

are inimical to a city's "health," and that increases in median income,

total employment, value added by manufacturing, and retail sales are

positive indicators of a city's "health."

Table 4-7 describes changes in socioeconomic measures of municipal

health over time when all cities were included. Change in white popula-

tion was the only category where statistically significant differences

were found to exist between the two groups of cities. This situation

changed considerably, however, when San Jose and New Orleans were dropped

from the analysis. Table 4-8 describes the relationships when these

cities were excluded from the analysis.

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picture. Six of the seven variables shown in Table 4-8 were signifi-

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omitting the two outlying cities increased the difference between the

means of liberal and conservative cities. Each of the anomolous cities

had the effect of reducing differences between the two groups. Second,

the variance and standard error of difference was reduced by omitting

these cities from analysis. This had the effect of increasing t scores

and the likelihood of statistically significant differences.

Summary

In this chapter the development and historical importance of the

concept of ideology were discussed. Ideology was not dealt with ex-

clusively as a theoretical concept. It was operationalized,with munici-

palities being categorized as either liberal or conservative. Of the

cities under investigation, twelve were identified as liberal and eight

were categorized as conservative.

Liberal and conservative municipalities were compared on a number

of measures. Bond ratings-said to provide an indication of the eco-

nomic health of cities-of liberal and conservative cities did not dif-

fer significantly in 1981. If the sample had contained a larger number

of cities, however, bond ratings of conservative cities would have been

statistically higher than those of the liberal cities. Greater differ-

ences existed in terms of changes in bond ratings over a twenty-year

period. During this time, conservative cities were statistically more

likely to improve their bond ratings, while the bond ratings in liberal

cities were likely to worsen.

Bond ratings provided an indication of gross evaluations of munici-

pal health. Socioeconomic measures delineated in greater detail the




Full Text

PAGE 1

THE IMPACT OF POLITICAL IDEOLOGY ON SOCIOECONOMIC AND BUDGETARY DYNAMICS By STEVEN G. KOVEN A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY UNIVERSITY OF FLORIDA 1982

PAGE 2

Copyright 1982 by Steven G. Koven

PAGE 3

ACKNOWLEDGMENTS Many people have contributed to my intellectual development as a political scientist, and a debt of gratitude is owed each of them. The person who looms largest in my intellectual maturation is the chairman of my supervisory committee, Dr. Bert E. Swanson. He provided the patience, guidance, and encouragement necessary for the completion of this research. He also allowed me to draw upon his years of accumu lated expertise in the area of urban politics. Other members of my supervisory committee, Dr. William A. Kelso, Dr. Alfred B. Clubok, Dr. James W. Button, and Dr. John M. Nickens, also contributed to this research. Special appreciation is given to Dr. John M. Nickens for his assistance in answering questions dealing with statistical techniques. I would also like to thank Dr. William A. Kelso for his honesty and in sight into bureaucratic procedures. Dr. Manning J. Dauer and Dr. Richard Scher have helped in the development of my research and teaching capabilities. I would like to thank both of them for their kindness and consideration. I also wish to thank my parents for instilling the values that made completion of this task possible. My wife, Andrea, deserves special commendation for her understanding and encouragement through out my doctoral studies. iii

PAGE 4

TABLE OF CONTENTS ACKNOWLEDGMENTS LIST OF TABLES LIST OF FIGURES ABSTRACT CHAPTER l INTRODUCTION The Setting .......... Influence on Local Policy Making Influence of Ideology at the Local Level Philosophical Differences Between Ideologies Ideological Transition ..... Empirical Differences Between Ideologies Conclusions ..... Notes . . . . 2 CONSERVATIVE PERSPECTIVE Page iii vii ix xi l l 2 5 5 8 11 13 14 16 Introduction . . . . . . . 16 Major Themes of Conservative Political Ideology 19 The New Right. . . . . . 32 Influence of Conservative Values on Local Government 37 Summary . . 39 Notes. . . 39 3 LIBERAL PERSPECTIVE Introduction Liberal Thinkers ... Social Welfare Legislation Radical Perspectives Neoliberal Positions Implications of Ideology to Summary ....... Notes ........ . Local Government 4 NEXUS BETWEEN IDEOLOGY AND SOCIOECONOMIC VARIABLES Introduction .......... Development of Concept of Ideology iv 41 41 43 47 51 59 62 62 64 66 66 66

PAGE 5

CHAPTER Dialectical View of Ideology .. . Empirically Characterizing Cities by Ideological Versus Regional Salience Bond Ratings, 1981 ....... . Changes in Bond Ratings Over Time Socioeconomic Indicators Summary . . . . Notes . . . . . Ideology Page 70 72 75 76 77 80 88 90 5 NEXUS BETWEEN IDEOLOGY AND BUDGET VARIABLES 92 Introduction. . . . 92 Problems of Comparability 94 Decision Rules . . . 96 General Expenditures 96 Revenues . . . . . . . 96 Comparison of per Capitized Budget Variables by Ideology 97 Comparison of Changes in Budget Variables by Ideology (20 Years) . . . . 103 Municipal Budgeting Strategies 106 Growth of Budget Variables 112 Summary . . . . 118 Notes . . . . . 122 6 CASE STUDY OF NEW YORK CITY History of Social Consciousness in New York City Budget Trends in New York City Causes of Fiscal Crisis Implications of Crisis Summary ... Notes ... 7 CASE STUDY OF DALLAS Introduction ... Image of the City Economic Growth Budget Trends . . . Relative Importance of Budget Variables Index of Relative Success .... General Comparison of Both Cities Tax Revolt Issue Summary Notes 8 CONCLUSIONS Basic Concerns of Study Findings of Research . V 124 124 126 148 155 158 161 164 164 165 168 170 176 188 190 191 193 195 196 196 197

PAGE 6

CHAPTER Underlying Themes .......... Dynamic vs. Static View of Budgeting Ideological Influence on Budgeting Decline of Saliency of Liberal Ideology Restatement of the Problem Notes BIBLIOGRAPHY APPENDIX A AMERICANS FOR DEMOCRATIC ACTION SCORES, BY DISTRICTS WITHIN Page 206 206 208 209 213 219 223 CITIES . . 232 B CHI-SQUARE VALUES . . . . . 238 C PERFORMANCE OF SOCIOECONOMIC VARIABLES. 239 D STANDARD ERROR OF DIFFERENCE . . 240 E NUMBERS OF SERVICES ASSUMED BY CITIES 244 F PER CAPITA REVENUES, FY1978-79. 245 G PER CAPITA EXPENDITURES, FY1978-79 247 H REVENUE GROWTH 1959-79 249 I EXPENDITURE GROWTH, 1959-79 251 BIOGRAPHICAL SKETCH ....... 253 vi

PAGE 7

LIST OF TABLES Table Page 1-1. Ideological Differences Between Conservative and Liberal Cities . . . . . . 6 2-1. New Right Candidates Supported 33 4-1. Ideological Ranking of Cities by ADA Scores 74 4-2. Municipal Bond Ratings, 1961 and 1981 . 78 4-3. Bond Ratings, 1981: Speculative and Upper Grade 4.4. Changes in Bond Ratings: 1961-81 . . . . 79 79 4-5. Differences in Socioeconomic Variables Between Liberal and Conservative Cities . . . . . . . . . 82 4-6. Differences in Socioeconomic Variables Between Liberal and Conservative Cities (New Orleans and San Jose Omitted) 84 4-7. Differences in Growth of Socioeconomic Variables Between Liberal and Conservative Cities, 1950-70. . . . . 86 4-8. Differences in Growth of Socioeconomic Variables Between Liberal and Conservative Cities, 1950-70 (New Orleans and San Jose Omitted) . . . . . . . . 87 5-1. Per Capita Revenues in Liberal and Conservative Cities, FYl 978-79 . . . . . . . . . . 99 5-2. Per Capita Expenditures in Liberal and Conservative Cities, FYl 978-79 . . . . . . . . . . . 102 5-3. Growth of per Capita Revenues in Liberal and Conservative Cities, 1959 to FY1978-79 . . . . . . 104 5-4. Growth of per Capita Expenditures in Liberal and Conservative Cities, 1959 to FY1978-79 .............. 109 5-5. Growth of per Capita Expenditures in Liberal and Conservative Cities, FY1977-78 to FY1978-79 . . . . 110 5-6. Absolute Growth of Budget Variables in All Cities, 1959 to FY1978-79 . . . . . . . 113 vii

PAGE 8

Table Page 5-7. Relative Growth of Budget Variables in All Cities, 1959 to FY1978-79 . . . . . . . . . 114 5-8. Growth of Spending in Dependent and Independent School Districts . . . . . . . . 117 5-9. Growth of Public Welfare Spending in Cities and Counties 119 6-1. Per Capita Expenditures, 1971 . 127 6-2. Changes in Expenditures in New York City from FY1975-76 to FYl 976-77 . . . . . . . . . 143 6-3. Changes in Expenditures in New York City from FY1975-76 to FY1978-79 . . . . . . . . 144 6-4. Percent Change in Weight of Revenue Sources, 1959-7.9 145 6-5. Change in Weight of Expenditure Categories: New York City, 1959-79 . -. . . . . . . 6-6. Relative Success of Individual Governmental Agencies, 195979 . . . . . 7-1. Estimated State and Local Tax Burden for a Family of Four, 1977 . . . . . . . . . . . . . 7-2. Change in Weight of Revenue Sources: Dallas and New York 7-3. 7-4. 7-5. 7-6. City, 1959-79 ..... Change in Weight of Expenditure Categories: Dallas and New York City, 1959-79. . . . ... Growth of per Capita Expenditures: Dallas and New York City, 1959-79 ........ Index of Relative Success: 79 . . . . . . Growth in Budget Variables: 1975 to 1978-79 ..... Dallas and New York City, 1959New York City and Dallas, viii 146 147 169 183 185 187 189 194

PAGE 9

LIST OF FIGURES Figure 2-1. The Laffer Curve ....... 6-1. New York City: Revenue Sources 6-2. New York City: Total Taxes New York City: Intergovernmental New York City: Property Taxes Revenue . . 6-3. 6-4. 6-5. 6-6. 6-7. New York City: Charges and Miscellaneous Revenue New York City: Expenditures New York City: Total Expenditures 6-8. New York City: Social Welfare Expenditures, Public Welfare, Page 26 129 130 131 132 133 135 136 Education, Health,and Hospital . . . . . . 137 6-9. New York City: Urban Service Expenditures (Police, Fire, San ita ti on ) 138 6-10. New York City: Amenity Expenditures (Library, Parks and Recreation) . . . . . . . . . . 139 6-11. New York City: Infrastructure Expenditures (Highway, Sewage, Housing) . . . . . . . 140 6-12. New York City: Overhead Expenditures (Financial Administration, General Public Buildings, General Control) 141 7-1. Dallas: Revenue Sources 7-2. Dallas: Intergovernmental Revenue 7-3. Dallas: Total Taxes .. 7-4. Dallas: Property Taxes 7-5. Dallas: Charges and Miscellaneous Revenue 7-6. Dallas: Expenditures (Urban Services, Infrastructure, 171 172 173 174 175 Overhead) . . . . . . . . . . 177 ix

PAGE 10

Figure 7-7. 7-8. 7-9. 7-10. Da 11 as: Da 11 as: tion) Dallas: Dallas: tion) Total Expenditures .... . . . . . . Urban Service Expenditures (Police, Fire, Sanita. . . . . . . . . Infrastructure Expenditures (Highway, Sewage) Amenity Expenditures (Library, Parks and Recrea. . . . . . . . . . Page 178 179 180 181 7-11. Dallas: Overhead Expenditures (Financial Administration, General Public Buildings, General Control) . . . 182 X

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Abstract of Dissertation Presented to the Graduate Council of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy THE IMPACT OF POLITICAL IDEOLOGY ON SOCIOECONOMIC AND BUDGETARY DYNAMICS By Steven G. Koven December 1982 Chairman: Bert E. Swanson Major Department: Political Science The salience of political ideology in determining public policy has long been an issue discussed in the field of political science. In the past, some authors have discounted the importance of political vari ables and extolled the virtues of economic variables as a determinant of public policy. Other authors continued to support the importance of political variables and discounted the relevance of economic variables. This dissertation investigates the impact of political ideologies on outputs and outcomes in large American cities. Cities are excellent laboratories in which to study the impact of phenomena. Impacts of political ideologies are compared between groups of cities differentiated on the basis of political perspectives. It was assumed that, if ideologies do in fact matter, differences between these groups of cities would emerge. Distinctions in regard to socio economic variables and budget outputs were explored and found to exist. In general, conservative cities were associated with more positive trends in variables measuring economic development, population growth, xi

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and ethnic composition. Conservative cities also differed in regard to budget outputs in the areas of intergovernmental revenue, general revenue, and general expenditures. These cities were less dependent upon inter governmental transfers and more likely to have a public sector of limited scope. The budgetary distinctions that were discovered between the differ ent ideological groups of cities appear to have been shrinking over the past twenty years. A convergence of outputs was discovered in these cities. A convergence of political philosophies was also noted in the case studies of New York City and Dallas, with New York City adopting conservative policies of economic stimulation and Dallas displaying a willingness to accept present or higher levels of taxation. The salience of political ideology is also evident on the national level. Distinct shifts in priorities can be attributed to the change in philosophies of our leadership and the need to implement policies which reflect the change in ideology. An understanding of the policy implica tions of changes in ideologies is pursued in this dissertation. Sensi tivity to the implications of political ideology appears to be especially relevant today. xii

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CHAPTER l INTRO DU CTI ON The Setting While some cities beautify a few square blocks and some downtown areas are experiencing real estate booms, the outlook for large American cities is not promising. Projects such as the Renaissance Center in Detroit, Harborplace in Baltimore, and Fanueil Hall Marketplace in Boston have received a great deal of attention, and at a casual glance may provide evidence to some that cities are on the way back to prosperity. Careful analysis, however, reveals this is not the case. A more accurate perception is offered by Anthony Down~ who termed such projects as "islands of prosperity in a sea of decline. 111 Many catchy phrases have been utilized to describe the plight of cities. Norton Long termed cities reservations. Like an Indian reservation, the poor, the unwanted, and the helpless live visited by those who make a career out of helping. 2 According to George Sternlieb, cities have turned into sandboxes. Inner city residents are like children who play in the sandbox while adults (government bureaucrats) have complete control over the activities in the sandbox. They may choose to provide carrots (benefits) in order to make the children happy or the stick (repressive police measures) in order to control unruly behavior. 3 The consequences of reservations or sandboxes are in Sternlieb's words both cruel and disagreeable. l

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2 Manuel Castells claims that urban problems are the result of funda mental structural contradictions inherent in the pattern of capitalist accumulation in the United States. 4 The results of these contradictions is a breakdown in the social order which perils the management of the urban system and leads to a fiscal crisis in central cities. This breakdown in social order may have led to the rioting and looting experienced in large cities during the sixties and seventies as well as the flight of middle-class white residents to the suburbs and other nonurban areas. In many large American cities, income suppliers or taxpayers are leaving while income recipients or welfare cases remain. Ira Katzelson explains that this trend in large cities is the result of new urban growth patterns. Katzelson further explains that the cause of this trend is due, in part, to the exodus of industry with unskilled jobs. This exodus is attributed to a number of factors: high taxes, high wages, high crime, and high real estate values. Today, only headquarters for large corporations remain in the center cities, industrial functions having long ago relocated. 5 Large cities will have to come to grips with this basic problem if they hope to recover and rebuild. Influences on Local Policy Making A number of authors have looked into the determinants of public policy: investigating the linkage between public policy and a wide array of political and environmental variables. Thomas Dye explored the association between environmental factors such as wealth, urbanization, economic system, education levels, inequalities, class structure, racial composition, and religious make-up, with political systems such as

PAGE 15

3 governmental form, constitutional type, bureaucracy, party system, power structure, patterns of participation, and level of conflict. Dye dis covered that economic variables such as urbanization, industrialization, wealth, and education had a greater effect on policy than political variables such as degree of interparty competition, level of voter turn out, extent of malapportionment, and Democrat or Republican control of state government. 6 Hofferbert concurred with Dye's findings that environmental or economic variables have an influence on public policy independent of political variables such as malapportionment and party t 7 compe, ,on. Other authors focused upon political structure as a determinant factor in public policy. Lineberry and Fowler maintained that unreformed structures maximized a political system's responsiveness to groups and interests in the population. Reformed governments such as the manager or commission form of government were discovered to insulate decision makers from potential conflicts and give professional managers more power. 8 This study will focus upon political ideology as a determinant of public policy. Political ideology in this sense refers to perceptions, goals, and ideals which are deeply held. It refers to a particular frame of reference in regard to political views. This broad frame of reference will be dichotomized into two groups (liberal and conserva tive) and empirically tested for differences in outputs (budget alloca tions) and outcomes (socioeconomic variables). It is contended in this dissertation that while some political variables may have negligible effects on determining public policy, '-,,1, ., ''

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4 political ideology in the broad cultural sense does, in fact, affect public policy. While political ideology has not received a great deal of attention as an explanation of local public policy, some authors have focused upon its policy effects. Paul Peterson and J. David Greenstone maintain that the most familiar model to explain public policy at any level is the "electoral organizational interest" model which views policy as the product of exchange and compromise between interest groups and politicians. 9 The authors found, however, that this model did not always explain behavior. When ideologies were perceived to be relevant in community-action controversies, they took precedence over electoral interests. 10 Agger, Goldrich, and Swanson also stated that policy may be influenced by political ideology. This is the case especially when the policy-making processes become highly conflictual: The maintenance of political hostility ... would seem to contra dict the pluralist conception of American community politics as being marked by consensual compromises on the part of hetero geneous political interest groups. Such hostility resulted, for the most part, from aversion to one another's political ideologies, and most decisional outcomes were a function of vic tories and defeats, not of compromises. 11 If, as Agger, Goldrich, and Swanson maintain, policy is sometimes a function of political ideology, then it is important to explore the policy implications of ideology. This study will investigate the budgetary distinctions attributed to ideology. It is hypothesized that budget levels and budget priorities will differ on the basis of ideology. Each locality must tax and provide services to its residents. l~hether differences in local budgetary policies can be linked to political ideol ogy is an important question.

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5 Influence of Ideology at the Local Level It is assumed that two philosophical perspectives dominate politics in America today: liberalism and conservatism. It is believed that each of these political philosophies ascribes to distinct sets of values and that these values will be transformed into differing public policies. The influence of political ideology on budgetary policy and the performance of certain socioeconomic variables will be determined through empirical analysis. It is assumed that liberals and conserva tives will differ in terms of the type and magnitude of taxes advocated. Differences that we would expect to exist between liberal and conserva tive perspective are summarized in Table 1-1. Table 1-1 also describes value differences between liberal and conservative philosophies. A major distinction which emerges in Table 1-1 is the difference in the desired role of government from each perspective. A desire for an expansive government is held by liberals and a desire for a restrictive government is held by conservatives. In terms of budgetary policy, one assumes that liberal philosophies will be more receptive to high rates of taxation and spending than conservative philosophies. Philosophical Differences Between Ideologies A review of political philosophies will help to explain policy differences between cities. For example, it is clear from a review of the normative literature that conservative cities are more likely to depend upon the free marketplace and less likely to use government activ ism as a means of maximizing benefits and social control. The "indi visible hand" of Adam Smith is invoked in order to assure us that the majority will benefit from the actions of free individuals. Individual

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Table 1 1 Ideolotical Diffe r ences Between Conservative and Libe r al Cit i es P ol I tleal P h tl o,ophlctl Genera 1 Revenue [xp e ndi t u,e Idco l oglu Be l hh Str1te91u S trt tegy Strat e gy I. CONS[RVATIV[ PERSPE C T I V E 1. Grut confidence 1n 1. Ghe to : lncenthes 1. O n ly c o ll ec t what Is 1. H i gh priority to free market compe t1to bus i ne s su to ne ede d to tn,ure lnfr.ntruct u re ( PASSIVE, LA I SS [Z FAlRE tio n l ocate In cit y ord e r and stab I I lty spe n ding SC OP E or GCVERNM{N I; 2 Soehl c o sts u e put 2. im l n.He costly 2 8., hnce the bud g et 2 l o w prio r ity to C LASS I CAL LIBERAl) of t h e sy stem bu r eau cru y. transfe r l Tu Ince n tives to s ocia l kelh r e J I n cr e as e d pr o ft ts pa ymen ts dtrrctly t o t h e ea 1 t h y sp e n d ing p ro v i d e for the t he p oo r 4 Plue u se r c harges J. low priori t y to efficien t J R e duce t he t n t ru on service s planning a n d 4 Th e Invisible h a nd s io n of gover n m e nt S L lmt t th e use of adm i nistra t io n of the market wt 11 int o t h e free market, intergonrrwen u 1 4 freeze govern opt imt ze t he ae a ns reduce r ed ta p e fun ds ine nt wages 1 f o f p rod uc ti o n 4 L o "er the 1111nimum n eede d w age hws a n d enc o ur 5 Have g e ner 1 ly age higher p roft ts low leve ls of s p ending II. LIBE RA L P [R SPECTI VE ( AC T IV[ INTERVENT I ON IS T S C OP[ OF G O VE Rll /lEN T) A N[W O [ A L" 1. Lt b erty a nd e qu a 1 Hy 1. Assht t h ose 1n n eed 1. W 011t h ,hou ld be 1. Hi g h priority t o LI BERA L of o p po r tunity ire wt th an nr a y of t ued p rogress iv e l y soci a l w e lf are es sent 1a l n lues of g overn m ent program s t B udget deficits spe nd i n g so c i ety 2. Em p has i ze J ob tra in 1re permiss i b le and 2 H i ghe r spend i n g 2 G overnm en t has a ing, fair ho us i ng enc o uraged t f need ed tn genera l f o r res po n,iblllty t o a fflnn.ithe actio n. J I nterg o ve r n m en t 1 1 1 pr og r a ms ensure the f u lf ille q ua l education. and t r rns f er s Ny b e J l e ss e mp has h on ment of these a l u n other p r ogra m s th a t n ecessary cons true t 1 on J S i nce the m a rk.et wou l d encourag e 4 A higher hvt l o f 4 lo w e r emphn t s on s y stem d6u not e neq u a l o pp o rtunit y r evenu e t ha n fo r I nfras tr uct ur e sure equitable c onserv a t 1 v e pending di stribution th e ph11osophf u h g ov e r n m e nt mu s t p r o n eeded t o fun d w i de for 11t nt mum g ov e rme nt a ct1 1 s tandar d s tf es .. .. ----.. .... .. .... .. .. . ------.. .... .. RA DI CAL 1. B e l ieve tha t t he I. N atio nalt ze p rtnt e 1 C o nf is ca te t he sur 1. Hi gh p ri o ri ty to LI BERA L probhffl s of so cie t y I n dustries p l us uptU: 1 o f soc f 1 l welfar e c a n be t ra c e d t o t h e 2. Redistr i bu te the society spendt n g ca p t t111 s t mode o f ove r al l wea l t h o f z A very h i g h leve l 2 High priorfty to p ro d uc t f o n s oci e ty s o th it It o f roenu e h ne edtd phnning a n d 2 Aeplac.t the capit a l w ou 1 d be more tn order to en s u r e a dmlnhtr1 t h 1 ht sy~tecn with I mor e equft-,ble t h e f uncti o ning of spcndi ng equitable 1nd h um a n e J. Put I n v estme nt s oc1 t ty J High le,el of form o f governm~ nt dect s lo ns t n the J. Very h i gh tu on govern m ent Sochlh m w o u l d e nd hands of t he wo r k er I ndividu al I n com e s pend ing tn th e 1 l it n 1 t10n o f 4 D emocrati ze the work In o r de r t o ha v e 1n g enera 1 l abo ~ a nd o t h t r fonll'I t nv l rorwne nt eqult a blt ,ocltl y o f opp r es s io n fou n d In co p lUl ht ,y ,t ""

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7 freedom and efficiency will be optimized by policies responding to these conservative predispositions. Conservative philosophies, particularly supply-side economic philosophies, incorporate the hope to stimulate economic activity by pro viding incentives. It is argued that people will work and produce more if they are guaranteed a larger proportion of their earnings, or, in other words, if taxes are reduced. The government would in turn receive greater amounts of revenue since the size of the pie would be increased. In this scenario, low tax rates would prevent money from flowing to nonproductive tax shelters, such as art and race horses; money would instead flow to profitable job-producing activities. Conservative philosophies are associated with a constricted, limited public sector It is believed that government activity should be limited to caretaker activities such as police and fire protection. Other activities such as the provision of housing are better left to the private sector. Regulations are viewed as illegitimate intrusions into the private sector and restrictions on individual freedom. Values such as individualism, freedom, and competition are extolled in this conservative philosophy. Conservative values are criticized by those who claim that it justifies a cruel and unjust system of production. Frederick Engels described the consequences of conservative philosophies in nineteenth century England. Engels stated that the City of Manchester reflected the following values: The brutal indifference, the unfeeling isolation of each in his private interest becomes the more repellent and offensive the more these individuals are crowded together within limited

PAGE 20

space .... The dissolution of making into monods, of which each one has a separate principle, the world of atoms, is here carried out of its utmost extreme. . Hence i t comes too that the social war, the war of each against all, is that the stronger treads the weaker under foot and that the powerful few, the capitalists, seize everything for themselves while the weak many, the poor, scarcely a base existence remains.12 8 Engels presents the basic point of view that individualism left unchecked by the larger community will create the type of situation where the few control the many. The electoral process, however, has had the effect of forcing conservative polities to be more responsive to the plight of the many who were being crushed by working conditions in an industrial society. At the turn of the century, Great Britain's social legislation blunted some of the disruptive forces of industrial development. Legis lation such as unemployment insurance and old age benefits assuaged the ravages of nineteenth-century capitalism. Much of this legislation originally enacted in Britain was implemented by the United States Congress at a later date. The welfare state represents government efforts to reduce the hard ship of citizens in need. The cycle of boom and bust in capitalist society described by Marx and Kondratief was not eliminated by the welfare state, but the suffering which resulted from the cycle was reduced. Ideological Transition This dissertation focuses upon the linkage between political ideology and changes in both budgetary behavior and socioeconomic variables Some authors claim that over the past years political philos ophies of the majority of Americans have moved to the right. In order to understand the reasons behind changes in political philosophy, some of the criticisms of liberal philosophies are explored Conservative writers

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such as George Gilder and Milton Friedman claim that the welfare state and the liberal philosophies that provide the foundation for it inhibit creativity, innovation, and incentive. 13 The public sector is said to be deadening because of high taxes which inhibit innovation and risk. Gilder claims that through welfare policies, which reduce incentive 9 to work, the government is unintentionally creating a permanent under class. Friedman argues that waste and inefficiency run rampant in government programs. Examples of government programs intended to assist cities may even have caused more harm than good. Jane Jacobs maintained that urban renewal hastened the decline of inner cities by destroying the t t f th t 14 1n egr1 yo ose c, ,es. Robert Cassidy explained how federal housing policy accelerated the decline of neighborhoods. Cassidy described in detail how the Section 235 program of federally guaranteed loans resulted in high numbers of foreclosures and housing abandonment. Shady mortgage bankers found it more profitable to lend to marginal clients who had a high like lihood of defaulting. In the event of default, the federal government paid off the loans, creating tremendous profits for lenders. Cassidy documented that, between April 1972 and March 1977, the foreclosure rate for FHA insured mortgages was 4.56 percent, a phenomenally high rate. A foreclosure rate higher than l percent is normally considered unthinkable in the lending business. 15 A high percentage of foreclosures could have been predicted because of the profit a mortgage company secured when a default occurred. Cassidy claimed that the mortgage bankers would set up field offices in racially changing neighborhoods. They would often falsify information about family income and credit ratings. In addition,

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10 once a family was evicted, there was no incentive to keep the house in good condition. Mortgage bankers would then often only do cosmetic work and bill HUD for more extensive repairs. Profits of over 30 percent received by mortgage investors were not uncommon when the federal govern ment was forced to make good on guaranteed loans after recipients defaulted. The mortgage investor ripoff is but one example of federal funds being diverted away from the poor by clever businessmen. Certainly there are administrative costs which accompany any program; yet the amount of money siphoned off from social welfare programs appears excessive. M. Stanton Evans observed that if the government had taken the increase in government expenditures for social programs and allocated it to the 23 million people who were poor, a family of four would have received $32,000. 16 Federal health policy enhanced the incomes of many highly paid doctors as well as the incomes of an army of administrators. Federal price support programs enhanced the incomes of wealthy persons in agri business. Federal tariff policy enhanced the incomes of industrialists in declining industries. Robert Eisner of Northwestern University described some of the consequences of federal price support programs. These programs often limit competition, provide benefits to those who do not need them, and raise the price to the consumer. Among the pro grams are the following: price supports for milk as dairy prices skyrocket; trigger prices to protect our steel industry from foreign competition as profits of our steel industry soar; licensing agreements and route restrictions that dramatically curtail competition in the trucking industry, laying the ground for repeated increases in prices

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11 and wages while trucks suffer from idle capacity and small truck ing firms go out of business; sugar quotas and price supports to maintain and raise sugar prices; acreage restrictions that reduce agricultural supply; import quotas, tarifs, and orderly marketing agreements that limit the import of cheaper and frequently better foreign automobiles, television sets, and textiles; and federal, state, and local restrictions in countless occupatioos and industries that reduce competition and raise prices.17 From Eisner's analysis we discover that the public sector does not function only to benefit the weak and downtrodden. Agribusiness, protected industry, and providers of medical services all gain substantially from federal largesse. Abuses of the liberal state have resulted in somewhat of a backlash in many large cities. Tax and spending policies of liberal governments may have a negative impact on the health of cities. Businesses may seek to avoid paying high rates of taxes by moving from the liberal cities with expansive governments to conservative cities with more limited governments. The flight of business may lead to other phenomena which are associated with decline, such as negative population growth and increases in elderly and minority populations. Therefore, political ideology has an effect on the v1el.l"."being of cities. In order to demonstrate the salience of ideology, distinctions between liberal and conservative cities will be empirically delineated by comparing budget outputs and changes in socioeconomic variables. The following section outlines the methodology employed in exploring these distinctions. Empirical Differences Between Ideologies Differences between liberal and conservative cities will be empirically identified. Cities will be typologized as liberal or

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12 conservative on the basis of scores assigned from the liberal organiza tion, Americans for Democratic Action (ADA). The following assumptions have been made in typologizing cities: 1. Congressmen and congresswomen of a particular municipality are representative of the political ideology of that municipality. 2. Americans for Democratic Action can accurately identify the ideological postures of legislators. Implicit in assumption two is the understanding that Americans for Demo cratic Action explores key votes that reflect ideological positions. Other indexes have been devised which rank congressmen and women on an ideological dimension. These indexes correlate highly with the ADA measure. Once ADA scores for a municipality have been computed, the scores will be arrayed. A cutoff point will be determined. Cities with high ADA scores will be classified as liberal, while cities with low ADA scores will be classified as conservative. These two groups will then be empirically compared. Socioeconomic variables and budget variables will be the focus of comparison between both ideological groups. The following socioeconomic variables will be explored. l. Bond ratings 2 Changes in bond ratings 3. Change in size 4. Ethnic composition 5. Age of residents

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6. Changes in ethnic population, changes in age of residents, changes in median income 13 7. Changes in total employment, changes in value added by manufacturing, changes in retail sales. Analysis of these variables provides an indication of the economic condi tion of cities. Demographic changes also provide an indication of desirability of cities to our mobile population. The socioeconomic health of cities will be estimated from investigation of the variables mentioned above. wi 11 Differences in budgetary behavior between both groups of cities also be explored using the following variables: l. Per capita revenuew (fiscal year 1978-79) 2. Per capita expenditures (fiscal year 1978-79) 3. Changes in per capita revenues between fiscal year 1959 and 1979 4. Changes in per capita expenditures between fiscal year 1959 and 1979 5. Budgeting 11 strategy 11 of cities. This investigation will determine whether differences exist between the two groups of cities: liberal and conservative. Conclusions A fundamental concern of this study is the role of political ideology on public policy. This dissertation will empirically explore policy differences between municipalities that differ on the basis of political ideology. It is believed that specific differences between both ideological groups will be found. Identification of these policy

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14 differences may prove to be a useful tool in predicting future policies and explaining present policy. The United States appears to be in a period of ideological transi tion. Dormant conservative philosophies have revived and are again being discussed. Liberal political philosophies which provided the foundation for the New Deal are being questioned. New agendas are being set and established policies questioned. An understanding of the effect of ideology on policy is especially important in this political climate. It is the aim of this dissertation to assist in providing a greater under standing of policy through a perspective of political ideology. This perceptive is particularly salient in view of the period of ideological transition and debate that we are undergoing today. Notes 1 Anthony Downs, "Urban Policy," in Joseph A. Pechman, ed., Setting National Priorities: The 1979 Bud et (Washington, D.C.: The Brookings Institute, 1978 p. 168. 2 Norton Long, "The City as Reservation," The Public Interest, ( Fa 11 1971), p. 22. 3 George Sternlieb, "The City a Sandbox," The Public Interest, ( Fa 11 1971), p. 17. 4 Manuel Castells, The Economic Crisis and American Societ (Princeton: Princeton University Press, 1980 p. 200. 25 25 5 rra Katzelson, "The Crisis of the Capitalist City Urban Politics and Social Control," in ~Jilliam Hawley, ed., Theoretical Perspective on Urban Politics (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1976), p. 215. 6 Thomas R. Dye, Politics, Economics, and the Public (Chicago: Rand McNally, 1966). 7 Richard Hofferbert, "The Relation between Public Policy and Some Structural and Environmental Variables in the American States," American Political Science Review, 60 (March 1966), pp. 73-82.

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8 Robert Lineberry and Ira Sharkansky, Urban Politics and Public Policy (New York: Harper and Row, 1978), p. 164. 15 9 Paul E. Peterson and J. David Greenstone, "Two Competing Models of the Policy Making Process: The Community Action Controversy as an Empirical Test," in ~Jill is D. Hawley, ed., Theoretical Pers ectives on Urban Politics (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1976 p. 67. 10 Ibid., p. 75. 11 Robert Agger, Daniel Goldrich, and Bert E. Swanson, The Rulers and the Ruled (New York: Wiley, 1964), pp. 14-32. 12 Frederick Engels, The Condition of the En lish Workin Class in 1844 (London: International Publishers Company, Inc., 1962 pp. 46-47. 13 George Gilder, Wealth and Poverty (New York: Basic Books, Inc., 1981); Milton and Rose Friedman, Free to Choose (New York: Avon Books, 1979) 14 Jane Jacobs, The Death and Life of Great American Cities (New York: Random House, 1961). 15 Robert Cassidy, Livable Cities (New York: Holt, Rinehart and Winston, 1980), p. 32. 16 william Simon, A Time for Truth (New York: Readers Digest Press, 1978), p. 224. 17 Michael Harrington, 11 \~hy the Welfare State Breaks Down, 11 in Irving Howe, ed., Beyond the Welfare State (New York: Schocken Books, 1982), p. 29.

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CHAPTER 2 CONSERVATIVE PERSPECTIVE Introduction The election of 1980 provides some indication that ideology is indeed relevant to American politics and American policy today. Whereas in 1964 and 1972 candidates who diverted from the broad center of politi cal discourse were soundly defeated, Ronald Reagan won a resounding victory with an appeal aimed right of center. The appeal of a strong national defense, lower taxes, and lower levels of government intrusion proved to be very popular in 1980. Reagan's appeal was firmly rooted in conservative ideals. Values of freedom, liberty, and initiative were extolled by the Reagan camp. These values are completely consistent with conservative ideological philosophies. Conservative philosophies have been transformed into conservative policies. The agenda of American legislation has shifted to the right. These policy shifts are reflected in the budgets. Growth of federal spending is likely to slow while ex penditure priorities shift. Social welfare expenditures are likely to be viewed with increased skepticism, along with high levels of spending in general. It is the contention of this study that budgetary behavior reflects the ideology of decision makers as much as it reflects any rational response to needs. The Reagan administration budget provides evidence that ideologies can indeed redirect priorities. Ideologies can also reverse long running trends. The Reagan administration appears firmly committed to 16

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17 reducing public expenditures, reversing a long-term trend toward larger and larger levels of government spending. Given the political realities of today, the Reagan administration has attacked spending through the strategy of cutting taxes and re ducing government revenue. As Reagan claimed during the campaign, not allowing the public sector to have increased funds in the first place is a reasonable strategy to take in trying to reduce spending. Allocation priorities of what revenue is collected also seems to have radically changed. Between 1960 and 1975, a period when the nation was at war, the proportion of money spent on defense in comparison to the nation's gross national product declined from 9.9 percent to 6.3 percent. Domes tic spending as a proportion of gross national product increased from l 20.2 percent to 26.6 percent. Although a fairly conservative Republican administration was in office during a good portion of those years, Congress was dominated by liberal legislators who advocated large increases in social spending and decreases in military spending. Liberal legislators today have not called for decreases in military spending but, given the mood of voters, only call for a slower rate of increase in the massive military ex penditures projected by Reagan. In order to make room for slower growth of government spending, social welfare programs aimed at helping the poor have been reduced. Richard Nathan estimates that over the next five years, military spend ing will rise by more than 40 percent, while domestic outlays are pro jected to decline by 15 percent. 2

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Conservative ideologues are likely to target public assistance expenditures for reduction. This is true because of their attitude 18 that welfare or the dole reduces initiative and desire for work in the "productive" private sector. As George Gilder has explained, if the dollar value of benefits (AFDC, food stamps, medicaid, etc.) received when not working is greater than the dollar value of benefits received from working, then a rational actor could maximize his or her benefits and material well-being by not working. 3 Gilder claimed that any wel fare system will eventually extend and perpetuate poverty if its bene fits exceed the prevailing wages of the community. As long as welfare is preferable (as a combination of money, leisure, and services) to working, the system will deter work and undermine families, according to Gilder. Studies conducted by the Department of Health, Education and Welfare in the cities of Denver and Seattle concluded that income guaran tees were dismal failures, reducing work effort by between one-third and one-half and increasing marital breakdown by about 60 percent. These findings are often cited by conservatives critical of federal programs aimed at assisting the poor. 4 Gilder claimed that the object of welfare should be to help people out from temporary problems, not to treat temporary problems as perma nent ones, and thus make them so. Welfare instead acts to erode work and family and therefore keeps people poor 5 Problems surrounding relief are not new. In the depression of the 1930s, it was recognized that relief created an unstable environment in contrast to the discipline created by work. Piven and Cloward stated

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19 that relief could not restore pride to recipients. It was merely a device for keeping the populace from discontent and disorder. 6 Conservatives of the depression era enunciated many of the themes restated by Gilder. Members of the Federal Emergency Relief Act (FERA) staff bemoaned in the mid-1930s that a gimme syndrome was spreading. People were beginning to feel that the government actually owes [relief] to them. And they want more. Many civic leaders expressed concern that relief payments alone did not prevent men, families and communities from deterio rating; after a time on the dole, they said, family relations eroded and men no longer wanted or expected to work.7 Conservative themes such as this are being revived today. What may be the effect of resurgent conservativism on local governments? This is a question that is explored in this dissertation. Before the actual effects of conservative thought can be measured, however, a thorough understanding of the development of this ideology is helpful. A review of major themes of conservativism will provide insights into policy making from an ideological perspective. Major Themes of Conservative Political Ideology Before delineating themes of one particular ideology or another, it is necessary to define the term. There exists no universally ac cepted definition for ideology although the term has been in usage for quite some time. L. T. Sargent claimed that ideologies were based on the value systems of society and simplified the complexity of the world into something understandable. 8 Frederick Watkins contended that ideologies usually represented militant and revolutionary ideas which opposed the status quo. 9 David Ingersoll defined ideology as consist ing of an assessment of the status quo and a view of the future which

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20 was materially better than that of the present. 10 Paul Sweezy, on the other hand, claimed that ideology was an ensemble of ideas, morals, and rationalizations which served the interests of the ruling class. 11 Max Mark claimed that ideology was usually associated with dogmatism. It contained a particular value and the assertion that only this value should be implemented. 12 Agger, Goldrich, and Swanson stated that ideologies include answers to a number of questions. Among other func tions, ideologies define what role government should play in allocat. 13 1ng resources. It should come as no surprise that a great deal of confusion surrounds the concept of ideology. It is often to the advantage of politicians to purposely confuse potential voters and to stake out the broad middle spectrum of political debate. In 1976 Jimmy Carter ap pealed to native southerners and conservatives who were opposed to entrenched bureaucrats in Washington or anybody else connected with the federal establishment. Carter, was cautious, however, not to antago nize liberal Democrats who represented powerful interests within the Democratic party Carter \
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blue-collar workers who traditionally had been members of the Demo cratic coalition. Reagan often invoked upbeat references to Franklin Delano Roosevelt, claiming that he represented the party of solutions while the Democratic party could only counsel acceptance of economic limitations. 21 Modern politics does not lend itself to an understanding of clear ideological distinctions between candidates. Conservative and liberal philosophies, however, differ in regard to fundamental values and ideals. This chapter reviews major themes of conservativism in order to provide insight into the relevance of political ideology to public policy. Two characteristics of American conservatives predominate in the literature: l. A clinging to the notions of laissez-faire economic prin ciples 2. A clinging to the old virtues of economic individualism and the frontier. Conservatives clinging to laissez-faire economic principles justify their philosophical positions on the basis of classical liberal be liefs toward liberty and economic freedom. There exists general agree ment that conservatives in America today are characterized by a cling ing to these two principles. Conservatives, however, differ in regard to priority of values. Some focus upon culture or the environment, others emphasize moral issues, while still others concentrate upon economic issues.

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22 Conservatives who characterize problems of society as a result of cultural forces include Edward Banfield, James Q. Wilson, and Daniel Patrick Moynihan. Moynihan has been classified as a "neoconservative" and "neoliberal," but labels have less significance than substance. Moynihan is firmly in agreement with Banfield and Wilson that cultural phenomena prevent the public sector from accomplishing its objectives to assist the underclass in America. Banfield asserted that government programs aimed at assisting the lower classes were doomed to fail because of the nature of the lower classes. Persons in the lower classes were characterized by Banfield as l. Radically improvident with a low sense of self-worth 2. Preferring immediate consumption, especially for sex and violence 3. Taking no interest in work but working in order to live 4 Unable to maintain satisfactory social relationships with others 5 P f . l t 1 . h 14 re erring v,o ence o 1v1ng ,n armony. In contrast to lower-class individuals, upper-class individuals were characterized by Banfield as being l. Self-respecting and self-confident 2. Independent and considerate of others 3. Motivated by internal standards 4. Tolerant of their children's preferences 5. Opposed to bigotry and violence. 15

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23 Many have termed Banfield a racist; yet he claims that culture is a product of socialization, not genes. Banfield concluded that little could really be done for the lower classes because of their attitudes and motivations. The culture in which lower-class attitudes and motiva tions are developed will prevent public programs from achieving success. Banfield felt that one must first change the culture in which the in dividual is largely formed before improvements to the individual could be expected to take place: So long as the city contains a sizable lower class, nothing basic can be done about its most serious problems. Good jobs may be offered to all, but some will remain chronically unemployed. Slums may be demolished, but if the housing that replaces them is occupied by the lower class it will shortly be turned into new slums. Welfare payments may be doubled or tripled and a negative income tax instituted, but some persons will continue to live in squalor and misery .... If, however, the lower class were to disappear-if, say, its members were overnight to acquire the atti tudes, motivations, and habits of the working class-the most serious and intractable problems of the city would all disappear with it. 16 Moynihan was not concerned with the time orientation of individuals which would determine class (Banfield's thesis); instead, Moynihan focused upon the problems of the Negro family. Moynihan concluded that the problems of inner cities were intractable because of the matriarchal structure of today's Negro families. Because of chronic unemployment, Negro men were unable to become strong husbands and fathers. The wel fare system even encouraged men to abandon their families, in which case the family could qualify for public assistance. Moynihan believed that problems with the Negro family made government programs inherently inadequate. 17 Like Banfield, Moynihan concluded that deep-seated problems precluded the success of federal programs as they attempted to alleviate the problems of the poor.

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James Q. Wilson maintained that efforts to assist the poor may even be counterproductive. This he attributed to the phenomenon of rising expectations and what Wilson termed the 11 psychological urban 18 problem." The psychological urban problem relates to expectations 24 increasing faster than achievements. Wilson claimed that, viewed in the historical perspective, conditions of the city in terms of housing and poverty have gotten better, not worse. The gap, however, between the quality of life in the central city and in the periphery has widened. This situation has led to urban discontent. Furthermore, the discon tent will not be alleviated in the short run: Efforts to lessen the gap between expectations and achievements will, in the short run, only make the discontent produced by the gap more acute. This is one of the inevitable tensions in a society committed to self-improvement.19 Banfield, Moynihan, and Wilson all expressed skepticism regarding the viability of federal programs. Each pointed to some fundamental problems affecting the individual which prevents the success of public programs. Today, conservative philosophies have their greatest impact in the field of economics. Conservatives are replacing Keynesian philosophies with supply-side and monetarist views. This marks a fun damental shift of economic policy in the nation. Supply-side economics is a restatement of Say's Law, a classical principle of economics presenting the view that supply creates its own demand. Supply-siders maintain that in an unfettered market, produc tion would generate income (wages, profits, and rents) which, when spent, would be just sufficient to clear the market of all the commodities produced.

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25 Two corollaries to Say's Law follow: 1. If there is unemployment and idle capacity, they can be elimi nated by an increase in production or the supply_ 2. Policies aimed at stimulating the economy need only be concerned with increasing production. Supply-siders advocate reducing the tax rate (especially for the wealthy who would be more likely to reinvest their income) in order to stimulate production. National income would rise, along with rises in productivity, which would result from increases in private investments. Government revenues would rise, even with the lower tax rate, because of the expansion of the economic pie. With the return of a vital economy, government programs such as unemployment insurance would be less costly and the budget could be balanced. Inflation would also abate due to the increase in productivity. Producers would be able to lower prices without sacrificing profits. Supply-side economists emphasize the negative effect taxes play on the economy. Arthur Laffer's primary point is that there are al ways two tax rates which will yield the same level of governmental 20 Th. t b . t l t revenues. ,s 1s rue ecause at a certain po,n governmenta ax rates become so oppressive that production falls and there is less revenue available to tax. The Laffer Curve, first drawn by Arthur Laffer on a napkin in a Washington restaurant, is displayed in Figure 2-1. Laffer argues that,when the tax rate is at 100 percent, all pro duction ceases in the money economy. People will not work in this economy if all earnings are taxed. The effect will be the same as if the tax rate were zero-government would not be able to collect any

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Figure 2-1. l 00 ......... C QJ u s.. QJ E c.. ..__,,, QJ 0::: X I0 Revenues The Laffer Curve. (Source: Jude Wanniski, The Way the World Works [New York: Simon and Schuster, 1978], p. 97.) N

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27 revenue. As taxes move down to point A or up to point B, the govern ment begins to receive money from taxes. Point A represents a much higher tax rate than point B, but, because of the flight from taxes into the underground economy and into tax shelters, the amount of revenue collected is identical. In similar fashion, government revenues will increase by either lowering or raising taxes until point Eis reached. Point Eis not a fixed number but can be represented by a high or low number depending upon attitudes and environmental conditions. For example, during the siege of Leningrad, Russian soldiers worked to their physical limit though they received the barest rations for their ser vices.21 Under other conditions people would not voluntarily allow the government to take the fruits of their labor with so little in return. Point E, therefore, is more of an attitudinal value-the point at which the electorate desires to be taxed and the point where tax revenues and production are maximized. The idea behind the Laffer Curve is that, paradoxically, more tax revenue may be collected by reducing taxes than by increasing taxes. The level of support for tax programs plays an important role in the Laffer Curve. If the populace is unsupportive of the government in general, and taxes specifically, then increasing taxes could drive business into the underground economy where the govern ment is unable to extract any revenue. High tax rates may also result in less investment and risk taking. From the Reagan economic program we can conclude that 11 Reaganomics 11 is based upon the proposition that we are in the upper portion (prohibi tive range) of the Laffer Curve, and that lowering the tax rate will in crease revenues by moving down the curve until point E (optimal point)

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28 is reached. Evidently, Reagan's economic advisors expected an increase in investment in plant and equipment to occur along with the reduction of taxes. This, however, has not occurred. It is unlikely that invest ment will occur in periods of slack demand such as a recession. Tax cuts have resulted in greater concentration of capital with the surge of mergers recently. They have not resulted in a surge of investment in new plants and equipment. All of this creates doubts in the via bility of supply-side economics. While the popularity of supply-side economics appears to be wan ing, conservative monetarists exert great influence. Conservative mone tarists are followers of Milton Friedman and the Chicago school of economics. They believe that inflation can be controlled by control ling the supply of money. Monetarists on the Federal Reserve Board have limited the supply of money in an effort to reduce inflation. It appears that they have been all too successful. As Friedman maintains, limiting the supply of money provides 3 cure for the ravages of infl b h t l 22 H. h l t d l at,on ut t e cure 1s no pain ess. 1g unemp oymen an sow economic growth are said to accompany slower growth in the supply of money. This has been the case in the recession of 1981-82. If any thing, the chairm3n of the Federal Reserve Board has been criticized by the White House for not sufficiently restricting the supply of money even though unemployment reached a post-World War II high. Conservative economists, in general, have an orientation differ ent fro m that of liberal economists. They are fully supportive of Adam Smith's concept of the "invisible hand." As developed by Smith, the "invisible hand" concept provides that no exchange will take place

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29 unless it is beneficial for all parties involved. The free market operat ing under the influence of this invisible hand, therefore, will provide the greatest benefit to society in general. Friedman presented numerous examples of the superiority of free societies (free market economies) when compared to collective or con trolled societies. The most obvious example is the contrast between East and West Germany. This is an excellent example of two nations with common cultures-the same civilizations and same levels of technical skills and knowledge. Friedman asks which nation has prospered and which nation has constructed walls to pen in its inhabitants. Friedman claims that on one side there are brightly lit streets filled with bust ling people. Newspapers and magazines expressing every variety of opinion can be freely purchased. Conditions reflect the economic and political freedoms that characterize this nation. However, "a walk of a few hundred feet, after spending an hour filling out forms and waiting for your passport to be returned, will take you to a city where the streets appear empty; the store windows dull; the buildings grimy. 1123 Other examples abound in Friedman's analysis. Yugoslavia, although its standard of living is lower than that of neighboring Western nations, such as Austria, is seen as a paradise in comparison to the Soviet Union. This is attributed to the greater degree of economic freedom found in Yugoslavia when compared to the Soviet Union. In the Far East, other nations that rely on private markets-Malaysia, Singapore, Korea, Taiwan, and Japan-are thriving. The economic development of two ancient civilizations with sophisticated cul tures-India and Japan-are also compared by Friedman. India is

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30 said to have many advantages over Japan, such as natural resources, a trained civil service, and an excellent railroad system. Friedman claims that, despite the many similarities between Japan in 1867 and India when it received independence in 1947, the outcomes of the two nations' economic development were quite different. In thirty years Japan extended social and ecomomic opportunity to all citizens, dis mantling its feudal structure. Economic improvements rapidly followed. In the thirty years following Indian independence, only lip service was paid to the elimination of the caste system and differences in wealth grew wider. Friedman attributes the differing success stories of Japan and India to the fact that Japan relied primarily on voluntary cooperation and free markets while India relied on central economic planning. Friedman concluded that the "deadening effects of government" may eventually destroy both the freedom and prosperity enjoyed in the United States: The experience of recent years-slowing growth and declining productivity-raises a doubt whether private ingenuity can con tinue to overcome the deadening effects of government control if we continue to grant ever more power to government, to authorize a new class of civil servants to spend ever larger fractions of our income supposedly on our behalf. Sooner or later-and per haps sooner than many of us expect-an ever bigger government would destroy both the prosperity that we owe to the free market and the human freedom P.roclaimed so eloquently in the Declara tion of Independence.2ij The spotlight in recent times has centered around economic policy; yet moral issues occupy an important place in conservative philosophies. Many conservatives blame the decline of America on a decline in the moral character of its people. They believe that, in order to "make America great again," there must be a return to a greater sense of

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31 morality in the country. Work, family, neighborhood, and God are, according to George Gilder, the pillars of our free society. 25 Erosion of those pillars has resulted in the erosion of American greatness. This moralistic theme is espoused by politicians such as Ronald Reagan and Jack Kemp Reagan based a large part of his campaign on restoring American greatness and returning to those values that made America great Kemp echoed this view, claiming that turning away from the pillars of our society (individual, family, and neighborhood) and relying upon Washington as the salvation for our problems is one of the fundamental mistakes of American society. Somewhere along the line we lost the focus on the individual, the family, and the neighborhood that was once the heart of the American Dream. Political leadership turned away from confi dence in the citizen as an individual, in the family as the bed rock of a free society, and the neighborhood as a basic unit in the democratic framework. Attention instead turned toward Washington, and to an infinite variety of grandiose programs and plans that were supposed to lead or command us to a better life. 2 6 This revival of moral posturing is indicative of the salience of reli gion and the New Christian Right today. The New Right firmly backed by the New Christian Right has experienced remarkable success in recent elections. The New Christian Right, advocating a politics of moralism, was successful in nominating Ronald Reagan in 1980 instead of other hope fuls such as John Connelly (who enjoyed the support of the business community), Robert Dole, George Bush, and Howard Baker. The New Christian Right also claimed credit for the election of 25 out of 30 targeted seats in the House of Representatives. Liberal Democrats,such as Elizabeth Holtzman of New York, Robert Coats of Oklahoma, Robert Morgan of North Carolina,and Jim Folsom of Alabama, all went down to

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32 defeat in the Reagan landslide of 1980. 27 (Table 2-1 lists the senato rial candidates receiving New Christian Right support and the outcomes of their elections. 28 ) Senators elected in 1980 will not come up for reelection until 1986. Twenty liberal senators up for reelection in 1982 have already been targeted by the New Right. Advocates of the New Right are gaining confidence and believe that they can now defeat liberal candidates. Pat Robertson reflects this sentiment: 11 Now America could defeat liberals, the ones who had failed to control dope, pornography, abortion, feminism, and moral decay because they were dedi cated to secular humanism. 1129 The confidence reflected in Robertson's observation indicates that 1980 may have been something more than a temporary aberration. Success has brought confidence as well as funds, and well-organized campaigns. Support from the New Christian Right has greatly aided the larger group which is termed the New Right. The New Right has demonstrated that it is a political force to be dealt with in the 1980s. Blue-collar Democrats concerned about 11 social 11 issues have combined with conservative Republicans concerned with the economy to form a solid coalition under the banner of the New Right. The New Right Although the New Right is generally associated with conservative Republican candidates, this is not necessarily always the case. The Democratic governor of Massachusetts, Edward King, is also associated with the New Right. King mobilized support through appealing to "social conservatives" in the state. The litmus test for the New Right will not necessarily be reflected in the future success of incumbent Republicans.

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------33 Table 2-1 New Right Candidates Supported Candidate, Senate New Right Group Outcome John East (R-N.C.) MM, NCPAC Frank Murkowski (R-Alas.) MM Warren Rudman (R-N.H.) MM Jeremiah Denton (R-Ala.) MM, NCPAC Paula Hawkins (R-Fla.) MM, CV, NCPAC, RR Charles Grassley (R-Iowa) CSFC Don Nickles (R-Okla.) MM, NCPAC, RR Dan Quayle (R-lnd.) MM, CV, NCPAC, RR, CSFC Mack Mattingly (R-Ga.) MM, NCPAC James Abdnor (R-S.D.) MM, CV, NCPAC, RR, CSFC Steven Symms (R-lda.) MM, CV, NCPAC, RR, CSFC Gene McNary (R-Mo.) NCPAC Paul Gann (R-Calif.) MM, NCPAC, CSFC Mary Buchanan (R-Colo.) NCPAC, CSFC Bob Dole (R-Kan.) MM Jake Garn (R-Utah) MM Paul Laxalt {R-Nev.) MM Key: CSFC Committee for the Survival of a Free Congress RR Religious Roundtable MM Moral Majority CV Christian Voice NCPAC National Conservative Political Action Committee W Won L Lost w w w w ~J w w w w w w L L L w w w

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Since 1960 incumbent presidents have not fared well. Richard Nixon was the only president reelected; yet he failed to serve out his second term, leaving the White House in disgrace after Watergate. 34 Lyndon Johnson decided not to seek reelection in 1968 while incumbent Presidents Ford and Carter were defeated in 1976 and 1980 respectively. Irrespective of political party, the endurance of the New Right can be observed through the policy positions of candidates. When Democrats such as Jerry Brown campaign on the platform of law and order, balancing the budget, and lowering taxes, evidence is provided that the agenda of political debate has shifted to the right. Significant distinctions exist between what has come to be known as the Old Right and the New Right. Paul Weyrich noted a number of these distinctions. Weyrich stated that the Old Right was strongly intellectual, pursuing a level of discourse above the language of the ordinary man. The New Right, in contrast, reaches the common man through a direct discussion of 11 gut 11 social issues such as crime, abortion, busing, and pornography. The Old Right gave primacy to laissez-faire principles. The New Right sup ports the free enterprise system but also realizes that people have come to expect certain things of their government and that it is possible to extend public services without destroying the free enterprise sys30 tern. The New Right is seen by ~Jeyri ch as the vanguard of a new di rec ti on for America. The Old Right was fearful of the media while, in contrast, the New Right believed that it had nothing to hide. The Old Right spoke abstractly about the decline of the West, and wrote off such groups as labor unions, churches, and the working class. In

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contrast, the New Right presents concrete programs that would in its view preserve the values of the middle class, and build alliances with groups that the Old Right disdained. 35 The New Right comprises what sociologist Donald Warren has termed "Middle American Radicals" (MARs). These MARs possessed the following characteristics in the mid-1970s: MARs had a family income of $3,000-$13,000. There was a strong presence among them of northern European ethnics, although Italians tended to account for more MARs than other groups. MARs were nearly twice as common in the South as in the north central states. They tended to have completed high school but not to have attended college. They were more common among Catholics and Jews than among Protestants, and among Mormons and Baptists than among other Protestant sects. They tended to be in their thirties or in their sixties and were significantly less likely to be professional or managerial workers than to be skilled and semi-skilled blue-collar workers.31 The New Right capitalized upon the general feeling among MARs that government favors both the rich and the poor to the detriment of the middle classes. The dominant perception is that "the rich give in to the demands of the poor, and the middle income people have to pay the bil 1. 1132 The MARs see themselves as ravaged in a "sandwich" attack by the autocrats from above and the underclass from below. The New Right is very pragmatic in its attempt to mobilize middle-class dissent. Richard Viguerie, the main political strategist of the New Right, believes that conservatives can build a majority coalition in America "Social issues" such as pro-family issues (right to life, gay rights), pornography, gun control, street crime, busing, drug abuse, capital punishment, and ERA are all issues that are per ceived as attractive to the New Right, and that could attract "social conservatives" from the Democratic party.

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Viguerie clearly sees the tide running in favor of conservative candidates. He claims that as early as 1966 the country exhibited second thoughts about the Great Society. In 1968 George Wallace capitalized on conservative sentiment, in 1972 George McGovern, the candidate of the liberals, received less than 2/5 of the popular vote, and in 1976 Jimmy Carter, campaigning as a conservative Democrat, de feated a field of liberal contenders for the nomination. 33 36 Viguerie cites a study by Dr. Harold Voth, psychiatrist at the Menninger Foundation, who declared that in his opinion the family unit was deteriorating in America. Dr. Voth claimed that industrialization, wars, economic pressure, and working mothers have all combined to de prive children of good parenting, that without committed parents there will be few healtbychildren and without healthy children a society will soon lose its vitality. The New Right cites this and similar studies, and is committed to working everywhere necessary to protect and pre serve the American family as it evolved during the nation's 200-year history. Viguerie concluded that "each American shares the responsi bility to make America great again. We must use whatever talents God has given us. This can take many directions. Community work, church activity and political involvement are just a few. 1134 It is sometimes difficult to notice long-term trends, but it appears that a conservative shift is occurring in the nation. Electoral success and the greater visibility of the New Right are two indicators of this shift. Enunciation of conservative policies even by Democratic candidates is another indicator. If indeed there is a shift toward conservativism, what this shift will mean to local governments is a

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37 matter of importance. Ideology, this study contends, has implications to local government. What these implications are is delineated in this dissertation. Influence of Conservative Values on Local Governments Conservatives are in general agreement on issues such as the role of government. Conservatives favor a restrictive government. Lack of unity, however, exists in regard to the emphasis conservatives place upon certain issues. This chapter has discussed three major themes of con servatives: culture, economics, and morality. Each of these perspec tives supports the general conservative positions of low taxes and low expenditures. "Cultural" conservatives are likely to support the posi tion of low taxes and low levels of services because of their belief that public programs are bound to fail. These cultural conservatives, such as Edward Banfield, James Q. Wilson, and Daniel Moynihan, present evidence that cultural characteristics are likely to doom any govern mental efforts to alleviate or improve conditions of the poor. Banfield focuses upon class based upon time orientation of in dividuals. Individuals seeking immediate gratification were charac terized as lower class while individuals who were able to postpone gratification were said to be of a higher class. Banfield concluded that lower class individuals could not be helped unless their cultural predispositions could undergo a transformation. Moynihan asserted that our current welfare system could not ade quately deal with the problems of the inner cities because it did not deal with the fundamental problem of the black family. Problems in the black family stemmed from the poor self-image of the often unemployed black father.

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38 Wilson presented the thesis that government programs may even be counterproductive, leading to rising expectations and increased frustra tion. The common thread connecting the views of Wilson with those of Banfield and Moynihan is the observation that government programs are not accomplishing their objective. If this is true, then the percep tion is that high levels of public expenditures are either wasteful or counterproductive. "Economic" conservatives such as the supply-siders, believe that government expenditures should be low in order to provide adequate in centives to business and to stimulate growth. The Laffer Curve demon strated that high rates of taxation could actually reduce the amount of revenue collected by a polity. Cities are particularly vulnerable to loss of business to other locations. Levels of taxation may influence businesses either to stay in the city or to relocate. New York City is an example of a government following supply-side philosophies Having suffered from the flight of business in the 1960s due to high rates of taxation, New York City put caps on property taxes and offered generous tax abatement plans to businesses after 1975. This policy was inaugurated in order to stem the outflow of jobs and busi nesses from the city. This conservative economic program had great suc cess in revitalizing many parts of downtown Manhattan. A real estate boom developed in parts of Manhattan in the late 1970s. Unfortunately, the program has not succeeded in revitalizing the decaying outlying boroughs of Brooklyn, the Bronx, Queens, and Staten Island. "Moral" conservatives attack government programs from the perspec tive that the dole or welfare increases marital breakups and reduces

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39 iniative. They argue that governments have taken over many of the responsibilities that previously rested with the family or the church, and as a result the pillars of our society-family, work, and neighbor hood-have been severely undermined. Summary This chapter has described resurgent conservative philosophies. It has provided insight into why public policy differences exist be tween people who have different values and perceptions. Theoretical positions have been explained. In later chapters differences between conservative and liberal cities will be empirically explores. Notes 1 Thomas Dye, Understanding Public Policy (Englewood Cliffs, N.J.: Prentice Hall, Inc., 1975), p. 199. 2 Richard P. Nathan, 11 Field Network Evaluation of the Reagan Domestic Program," Public Budgeting and Finance 1 :4 (Winter 1981), 85. 3 George Gilder, Wealth and Poverty (New York: Basic Books, Inc., 1981), p. 122. 4 Ibid., p. 120. 5 Ibid., p. 127. 6 Frances Fox Piven and Richard Cloward, Regulating the Poor: The Functions of Public Welfare (New York: Random House, 1971), p. 80. 7 Ibid., p. 81. 8 Lyman Tower Sargent, Political Ideolo ies: parative Analysis, noted in Leon Baradat, Political Ideologies wood Cliffs, N.J.: Prentice-Hal 1, 1979), p. 32. A Com Engle9 Frederick Watkins, The Age of Ideology-Political Thought, 1950 to the Present, noted in Leon Baradat, p. 33. 10 David Ingersoll, Communism, Fascism, and Democracy, noted in Leon Baradat, p. 33. 11 Paul Sweezy, "Vietnam: Endless War," in Marvin Gottleman and David Mermelstein, eds., The Failure of American Liberalism (New York: Vintage Books, 1970), p. 594.

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12 Max Mark, Modern Ideologies (New York: St. Martin 1 s Press, 1973), p. 3. 13 Robert Agger, Daviel Goldrich, and Bert Swanson, The Rulers 40 and the Ruled (Belmont, Calif.: Wadsworth Publishing Co., 1972), p. 10. 14 Edward Banfield, The Unheavenly City Revisted (Boston: Little, Brown & Co., 1970), pp. 57-59. 15 Ibid., pp. 61-63 16 Ibid., pp. 234-235. 17 Lee Rainwater and William Yancey, 11 The Moynihan Report: Opposi tion in the Permanent Government," in Douglas Fox, ed., The New Urban Politics (Pacific Palisades, Calif.: Goodyear Publishing Co., Inc., 1972), p. 118. 18 James Q. Wilson, 11 The War on Cities, 11 The Public Interest, no. 3 (Spring 1966), p. 31. 19 Ibid., p. 32. 20 Jude Wanniski, The Way the World Works (New York: Simon and Schuster, 1978), p. 97. 21 Ibid., p. 99. 22 Milton Friedman and Rose Friedman, Free to Choose (New York: Avon Books, 1981), p. 261. 23 Ibid., p. 47. 25 Gilder, 74. 24 Ibid., p. xx. 26 Jack Kemp, An American Renaissance: A Strate for the 1980 1 s (New York: Berkley Books, 1979 p. 163. 27 Erling Jorstad, The Politics of Moralism (Minneapolis: Augs bert Publishing House, 1981), p. 101. 28 Ibid., p. 102. 29 Ibid., p. 90. 30 Paul M. Weyrich, 11 Blue Collar or Blue Blood: Compared to the 01 d Right, 11 in Robert Whitaker, ed., Papers (New York: St. Martin 1 s Press, 1982), p. 51. The New Right The New Right 31 samuel T. Francis, 11 Message from MARs: The Social Politics of the New Right, 11 in Robert Whitaker, ed., The New Right Papers (New York: St. Martin 1 s Press, 1982), p. 67. 32 Ibid. 33 Richard Viguerie, "Ends The New Right Papers (New York: 34 Ibid., p. 26. and Means, 11 in Robert Whitaker, ed., St. Martin 1 s Press, 1982), p. 33.

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CHAPTER 3 LIBERAL PERSPECTIVE Introduction Liberalism, like conservativism, stands for a specific group of ideals and values. It is assumed that these different values will lead to different policy preferences and different governmental pri orities. A review of the philosophies underpinning liberalism pro vides some insight into the underlying reasons for the policy differ ences. A review of liberal legislation also should provide insight into how liberal philosophical beliefs are eventually transformed into law. Liberals hold a view of the world different from that held by conservatives. Liberals are generally optimistic about the ability of man to improve life through human reason. They believe that people are basically good and that factors which contribute to the realization of human potential should be carefully nurtured. Liberals believe that people are rational and that all should have equal opportunity to suc ceed in life. Ideals of liberals also hold that all men and women are fundamentally entitled to equal treatment under the law. This view con trasts with the conservative belief that inequities are inevitable. Under the view of Adam Smith, inequities of wealth will arise but this is necessary in order to optimize benefit to all. Today, much confusion surrounds the meaning of the term liberalism. In the early nineteenth century, liberals concerned themselves with 41

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what they considered to be oppressive obligations to authoritative in stitutions such as the state and the church. These institutions were perceived to restrict individual freedoms and the fulfillment of the human personality. 42 "Classical" liberals believed that government could be oppressive if it was given too much power. These philosophers sought to protect individuals from the abusive power of the state. Today 1 s liberals, however, view the abuses of industry as a factor in inhibiting the standard of living of the masses. By the late nineteenth century many social critics agreed that the dangers of excesses from the industrial revolution had become more insidious than the dangers of government. Today liberals try to use the government or the state in their efforts to curb the abuses of industry. C. B. Macpherson claimed that the term 11 liberal 11 is a source of confusion today. He claimed that it means so many things to so many people that it can easily be misunderstood. 1 This confusion that Macpherson refers to is especially great when it refers to politicians who benefit from blurring issues. It is also great in periods of ideo logical transition such as is the case today. Labels describing ideological positions may be quite confusing. Daniel Moynihan was referred to as a 11 neoconservative 11 in the mid seventies but is referred to today as a 11 neoliberal. 11 The confusion does not lie in a change of philosophy by the senator but rather in a change of reference point. The political center has moved so far to the right that labels assigned to people like Moynihan are changing.

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43 This chapter reviews liberal thinkers, the evolution of liberal legislation, other "left of center" positions, and the implications of liberal perspectives to local governments. As with the discussion of conservativism, it is hoped that this discussion of liberal views will provide an understanding of fundamental values and ideals. This under standing of the ideals of liberal ideology will assist in evaluating policy. Liberal Thinkers The classical view of liberalism is rooted in the period called the Age of Enlightenment. This view emphasizes man 1 s rationality and reasonableness. Reason is stressed rather than tradition. For liberals, contract replaces status, and individual rights replace the rights of existing power holders. 2 Liberalism also tends to support the rights of the individual against the forces of the old Establishment. "War on privilege 11 was a rallying cry of early liberal philosophers. These philosophers utilized liberal beliefs as a weapon in the struggle against privileges of the aristocracy. Liberal ideals reflected the views of the upper-middle classes who favored institutional protection of their rights. Liberal insis tence on constitutional government, division of powers, and clearly defined tasks for the executive, legislative, and judicial branches of government protected the middle classes from arbitrary actions by the government. This liberal doctrine which protected individual rights against potential abuses of government served as a major doctrine from the seventeenth century to the nineteenth century. 3

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44 Classical liberal authors from John Locke to John Stuart Mill questioned privileges of the ruling strata. Locke's concept of civil society was derived from two closely connected ideas: the social con tract and natural law. The social contract was an agreement of the people made of their own free will. Individuals freely agreed to enter a civil or political society in order to better secure their rights. Locke believed that people were equal only in that they had the same rights under the laws of nature. The ability to defend those rights varied from individual to individual. Injustices could prevail if one person struggled with another who was stronger. Right or wrong would not enter into the picture under this scenario. Locke felt that, in order to ensure justice, individuals in a community should make a con tract among themselves, thereby removing themselves from the state of nature. A society would be created through this social contract. Many of Locke's ideals are embraced by today's liberals; other views of Locke are embraced by today's conservatives. Locke favored a capitalist economic system, believing it to be the most conducive to individual freedom. Locke, however, would probably have objected to the great disparities in property that existed in latter-day capitalism. Locke clearly believed that property accumulation should be limited No person should accumulate so much property that others would be pre vented from accumulating the necessities of life. 4 Without such a re striction, according to Locke, it would be possible for one person, through control of property, to deny others their identities and even their ability to be fully human.

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45 Locke assumed that the basic interests of all people in a given society were the same. This is referred to as the principle of collec tive interests. Locke further believed that whatever was beneficial to the society as a whole would be beneficial to the individual. This led to the belief that the majority vote is the most important feature of political decision making. 5 Locke's legacy to liberal thought rests on his belief that the purpose of government is to serve the people. The government's sole purpose is to maintain and increase individual rights and liberties. While these ideas are consistent with the values of liberals, they are, however, also consistent with the values of conservatives. Jeremy Bentham was in the forefront of a second wave of liberal thinkers. Bentham believed that people could use reason to improve their lives. A basic assumption of his was that men seek to achieve pleasure or happiness. Bentham's personal view maintained that the greatest end for society would be the maximization of the greatest hap piness: In the public sphere, he [Bentham] considered that the only end which could be reasonably and acceptably postulated for a society at large was the maximization of aggregate happiness, the great est happiness of the greatest number, and the principle of utility laid down that actions and institutions were to be judged by how far they were conducive to this end.6 Bentham did not believe that in a properly ordered society the long-term interests and happiness of individuals would be in conflict with the happiness of others in society. Laws would discourage anti social behavior, which would have the effect of molding men's de sires to seek pleasure in a manner conducive to the general happiness. Bentham contributed greatly to the development of liberalism as we

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46 know it today. He presented a practical standard by which to measure the value of particular policies. 7 He set liberalism on a new course that could significantly improve the conditions of society. Bentham also provided motivation for many social reforms adopted by England be tween 1930 and 1850. 8 The most important philosopher of the nineteenth century was John Stuart Mill. Like Bentham, Mill was a political activist and spent three years in the House of Commons. He supported the radical issues of his day such as free education, trade unionism, equal appor tionment of parliamentary seats, and repeal of the corn tariffs. 9 Mill clearly emphasized energetic and original individuality. Emphasis on spontaneity, character, and originality in human beings typified Mill's writing. The few experimenters and improvers of society were exalted as the "salt of the earth. 11 He [Mill] favoured the active, self-helping type of man required in a democracy as against the passive type of character, pre ferred by the government of a monarchy or aristocracy. Subject tion to the will of others and the virtues of self-help and self government were incompatible. 10 Mill argued that, although democracy was the preferable form of govern ment, even democracy could limit individual liberty. For this reason, freedom of speech and thought should be given absolute protection under the law. Mill believed that individual freedom was the surest way of reaching happiness. This position, consistent with the view that the First Amendment to the Constitution is the most important section of the document, has been supported by some justices of the United States Supreme Court. 11 Mill's views concerning minority rights are often quoted. His position on this matter is reflected in the following statement: 11 If

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47 all mankind minus one were of the opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person than he, if he had the power, would be in silencing mankind. 1112 Mill was also a firm believer in freedom of the press. He felt that in conditions of the free competition of ideas, the right ideas would prevail. This was further justification for an open, free, and uninhibited expression of minority opinions. Mill was the first liberal philosopher to attack laissez-faire capitalism. His attack against the "enslaving capacity of capitalism" was so effective that few liberals have supported laissez-faire since his time. 13 Both Bentham and Mill laid a foundation that liberal philosophers could build upon. Both were interested in political ac tivity. Bentham believed that the government should take positive steps to maximize the happiness of the society. Mill became an activ ist, supporting the radical issues of his day. The liberal legacy in America owes much to Bentham, Mill, and Locke. Social Welfare Legislation Philosophers such as Mill, Bentham, and Locke fostered liberal values and ideals. The ideal of liberals, namely,the concept that reason will lead to solutions to society's problems, led to social welfare legislation aimed at alleviating the conditions of the poor and the working class. Modern social welfare legislation dates back to the time of Otto von Bismark of Prussia. Bismark feared that class war could erupt in Germany if the state ignored the problems of the work ing classes. He urged "a little more Christian solicitude for the working man," at a time \vhcn Marxist views were gaining in popularity. 14

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Social welfare legislation was also inaugurated in Great Britain at the turn of the twentieth century. Liberalism underwent a distinct transformation at this time. Concern for individual rights and liber ties was replaced with concern for social justice for all the people. This concern for greater justice and equity led to legislation in the areas of health insurance, pensions, unemployment, and care of school children. 48 Liberals, spurred by the writings of John Stuart Mill, began to move away from the defense of free market competition. The social costs of defending competition on the basis of individual freedom had become too great. The industrial revolution in Britain had created massive poverty and social disruption. In response to these unfavorable condi tions, people began to demand that the government provide some protec tion for the exploited workers. The idea that a self-regulating mar ket would provide the greatest benefit for the entire society simply collapsed in the face of reality. Liberals began to concern themselves with social justice and the problems of inequitable distribution of resources. A "new liberalism" evolved, stressing social reform. Two conceptions of social reform were l. The notion of rendering help to individuals and groups that were materially disadvantaged with respect to their fellow citizens, and 2. A desire to redesign society in such a manner as to realize ethical values among all members; to heighten awareness of communal ends and the changing role of the state. 15 Advocates of this brand of liberalism,such as Mill, pushed for social legislation in Parliament. If industrialization and capitalism

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49 infringed upon the rights of workers to achieve a satisfactory life, then the belief of these liberals was that the government should step in to assure workers their rights. Old age pensions were among the first measures recommended in Britain. The corrollary in the United States to Britain's old age pensions is our system of social security. It was argued in Britain that, since pensions were payable to state servants (soldiers, sailors, postmen, and policemen), they should also be payable to other workers. Old age pensions would also serve to increase aggre gate demand, improve social justice, and create a fuller perception of the state as the leader of a community. The Nation, an organ of n ew liberalism, enthusiastically endorsed the concept of universal pen. 16 s10ns. Old age pensions successfully expressed the sense of responsi bility of the state to provide a minimum standard of living to the elderly who had contributed to society. The provision of old age pen sions is based on the recognition that earnings in old age will be in sufficient and that the state should have the responsibility of caring for its needy. Prominent liberals such as L. T. Hobhouse recognized that pauperism among the aged was not due to shiftlessness, as the case may be with the younger poor, but was the normal fate of the poorer classes. It also became recognized that unemployment was not the result of shiftlessness. Unemployment was a cyclical phenomenon in industrial Britain. Workers would be periodically laid off because of slack de mand. This was no fault of their own and not a result of laziness, irresponsibility, or other character defects. In the early twentieth

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50 century the government of Brfta in accepted res pons i bi 1 i ty for the pro bl ems of unemployment. It was recognized that the community must take re sponsibility for some of the problems that were foisted upon its mem bers. Care of school children was another issue that attracted a good deal of attention in Britain. State care of young children was per ceived as a viable means for breaking the vicious circle of social dis tress characteristic of the lower classes. The Speaker, another liberal publication, claimed that it was the duty of the state to insist that every child in elementary school have the physical sustenance required for development. 17 The Nation claimed that parents should supply the necessary level of sustenance but, in the event of their refusal or in ability, it should be supplied by voluntary means or the local govern ment.18 A number of motives were involved in advocating the feeding of school age children. Justice and humanitarianism were major motives; yet the development of a sense of social solidarity did not play an unimportant role. Children were viewed as a natural resource indis pensable to the well-being of the community. Their development was regarded as too important to be left entirely to individual parents. The area of health care is still another area where the govern ment of Britain accepted responsibility for the provision of services. The Insurance Act of 1911 provided national health and unemployment insurance for all workers. Joint responsibility was assumed by workers and the state in order to ensure this protection. The British system of health care is referred to by many in this country as an example of poor health coverage; yet many consider it better than the

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situation in this country, where a person's life savings may be wiped out by medical costs. The United States has adopted some of Britain's views toward health care, but,with Medicaid for the poor and Medicare for the aged,we have not gone as far as Britain or a country such as Israel in providing free health care to all. In other areas, such as old age pensions, unemployment insurance, and the feeding of school children, the United States has closely followed the British initia tives. 51 Many persons credit the social legislation that was passed in the United States during the Great Depression with saving our economic sys tem. There are many radical writers who do not believe that the capi talist system should have been saved and that it is doomed to collapse. They advocate radical changes which would guarantee less exploitation, greater equality, and greater justice. In this regard they can be per ceived as an extension of the liberalism expressed at the turn of the century in Britain. Radical Perspectives The radical perspective is heavily influenced by the works of Karl Marx and Frederick Engels. Marx's beliefs were founded on the principle that the capitalist system of production is oppressive and ultimately doomed to fail. A dictatorship of the proletariat would emerge as the workers would rise up to replace the bourgeoisie. Even tually, the state would "wither away" and an egalitarian society run by the workers would prevail. A number of factors were suggested as the cause of the inevitable downfall of the capitalist state: for example, appropriation of the

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52 "social surplus product" and the "alienation of labor." Social surplus product refers to the part of production produced by the laboring class but taken from them by the ruling class. 19 Alienation of labor refers to the cleavage between the producer and the product. Division of labor and commodity production are said to contribute to this alienation. 20 Pride of workmanship is reduced with the newer means of production such as division of labor. Business cycles represented another part of Marx's overall conception of capitalism. Capitalist society was per ceived to be plagued with periodic cycles of boom and bust. These cycles were said to be inherent and necessary in order to "rationalize" production. Less efficient firms will be driven out of business in periods of business contraction. Marx claimed that since production is determined for the realiza tion of profit rather than for the satisfaction of social need, the masses are oppressed and cyclical trends of boom and bust occur. Manuel Castells, a modern-day Marxist, emphasized these problems caused by the privation of profits coupled with socialization of costs. 21 Frederick Engels described how capitalism's influence extended even into the spatial arrangement of cities. Engels claimed that in the city of Manchester the working classes lived in the immediate vicinity of the commercial district. The upper and middle bourgeoisie lived beyond these quarters, the middle class or middle bourgeoisie, in Engels' terms, lived in regularly laid out streets, and the upper bour geoisie lived in remoter villas and gardens. 22 In a large sense the living arrangements in twentieth century America do not differ from the living conditions Engels described

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in nineteenth-century Britain. Suburbanization has allowed middle and upper-class Americans to escape the much harsher conditions of the inner cities. Many working-class residents in America today have been able to escape to the suburbs themselves. The phenomenon of the lower classes remaining in the center city, however, has not changed. 53 David Harvey expanded upon Engels' concept of spatial arrange ment being determined by economic and cultural relationships. Harvey differentiated between 11 physical feelings about the spatial symbolism which surrounded the individual. 23 Cultural conditioning, group learn ing, and individual learning were all associated with social space. Harvey advocated a more egalitarian social structure than the one which is said to exist in the United States He claimed that 11 hidden re distributions" lead to greater inequalities than we are led to believe. A policy of 11 overkill 11 in redistribution of wealth is advanced in order to counterbalance apparent and hidden inequities. Harvey, however, was not optimistic about the political realities of a campaign to redistri bute wea 1th : These [mechanics governing distribution] seem to be moving us toward a state of greater inequality and greater injustice. Un less this present trend can be reversed, I feel that almost cer tainly we are headed for a period of intense conflict [which may be violent] within the urban system.24 Harvey maintained that central authorities should allocate re sources in such a manner that social justice would be maximized. Terri torial justice (a term first coined by Bleddyn Davies in 1958) was also advocated by Harvey. 25 It refers to the equalization of justice between boundaries, measured by assessment of need; contributions to the common good; and merit. Actual resource allocations can be compared to

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54 projected allocations based upon these three measures, which, in turn, will measure the extent of social justice in each of the territories of t 26 a na on. Harvey claimed that policies which maximize the prospects for the least fortunate regions should be devised. Experience with political realities, such as gerrymandering, indicates that it is unlikely for resources to be distributed justly. Harvey speculated that in a capi talist society, capital is most likely to flow to places where the rate of return is highest, and unlikely to flow to areas of greatest need. He found it hardly surprising that the housing market of inner cities has collapsed and that more investment has occurred in the outer rings of the cities since investment opportunities are likely to be more profitable in these areas. Harvey concluded that in order to improve the quality of life in urban areas, structural changes must be made in our society. Produced and controlled scarcity is one of the factors that Harvey claimed pro duces the exploitation of the many by the few. If it is accepted that the maintenance of scarcity is essential for the functioning of the market system, then it follows that deprivation, appropriation and exploitation are also necessary concomitants of the market system. In a spatial system this im plies that there will be a series of appropriative movements be tween territories which leads some territories to exploit and some to be exploited. This phenomenon is most clearly present in urban systems.27 Michael Harrington concurred with both Harvey and Engels that structural conditions within the capitalist society have produced tremen dous inequalities in our system and led to the exploitation of the many by the few. Harrington claimed that the American pol it ical and economic system must be made accountable for laying waste to the urban areas of

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55 America. He attributed the decline of our cities today to blind obedience to corporate priorities, the market, and technology. Tha t human costs of market decisions are rarely considered he saw as a defect of the system: The market analysis of the urban cr1s1s obscures both the real costs and the social and economic consequences of the process it describes. Not so incidentally, this flaw is in the interest of the rich and powerful and to the detriment of the most vulnerable people in the nation. In this theory, it is tacitly assumed that one must, in the name of rationalization and efficiency, let the market forces do their work even if the result is havoc for millions and for entire communities.28 Harrington claimed that abandoning neighborhoods in cities such as New York, Detroit, Cleveland, and St. Louis was one way of getting rid of old plants and investing in new areas. Whether or not this is the best method of modernizing an economy is questioned, since the social cost of disinvestment is often ignored. Harrington believed that major corporations should bear some of the social expenses if they are to re locate their plants. Heclaimed that they are able to walk out on their employees and their former city without so much as waving goodbye. Harrington completely rejected the validity of the market theory of development. These theories are said to represent a remarkable alibi which absolves those involved from responsibility for economic disasters. Harrington postulated that the federal government played a major role in creating the economic problems that plague cities today. He cited favorable tax treatment offered to home mortgages, huge expendi tures for highways, investment tax credits for businesses, and inequi table distribution of federal money back to cities as examples of federal policies which had a negative effect on cities. Harrington also viewed New Federalism as penalizing the large cities. Nixon's plan to turn

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56 money back to the states and localities to use at their discretion, rather than to earmark the funds to mandated programs,resulted in larger proportions of federal money going to small and moderately sized cities and smaller proportions going to the largest cities. Harrington esti mated that, between 1968 and 1975, the share of money going to large cities declined by 20 percent. 29 Politically, this is understandable since many of the largest cities are Democratic and unlikely to benefit from Republican policies. Harrington concluded that his proposition about the federal government fueling urban decline was supported by the facts: The destruction of great American cities was not the result of economic forces acting autonomously and independently of the human will. Rather these forces operated in, and were signifi cantly shaped by, an environment created by political decisions which were systematically and coherently thougthlessas far as social cost and consequence were concerned.30 Others have discussed the structural problems alluded to by Harvey, Marx, and Engels. Manuel Castells, a prominent "structuralist," de scribed the problems of our cities. Castells defined the crisis of declining services and deteriorating infrastructure in American cities as a manifestation of a larger economic crisis in our system. He attri buted the larger economic crisis to the socialization of costs and privatization of profits that occur in our capitalist form of govern ment. Castells cited the following basic structural contradictions in our structure: 31 1. The contradiction between the growing need for public ser vices in a system of socialized consumption and the increas ing privatization of profits

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57 2. The contradiction between the growth of local governments responsibilities and their inability to deal with the problems either financially or institutionally 3. The contradiction between the need to maintain central func tions and the urban sprawl of metropolitan areas 4. The contradiction between the concentration of surplus popula tions in the center cities and the lack of mechanism of inte gration in the center city. Castells maintained that these contradictions threatened the very basis of urban existence. They represented a growing breakdown of the means of collective consumption. This breakdown could be witnessed in the destruction of portions of cities such as in Baltimore, Boston, and St. Louis. The South Bronx of New York City was cited as the most famous example of the decay that threatens our large cities. In the South Bronx the process of abandonment and deterioration of real estate values had encouraged the setting of fires in order to collect money from insurance companies. Castells claimed that there were 12,300 fires in the South Bronx in 1974, approximately 10 every night. The going rate paid to children to start the fires was incredibly only three to ten dollars. 32 This statistic in itself is indicative of the chaos that ran rampant in New York during the seventies. The South Bronx represented the most famous but not the only area of New York in turmoil. Brownsville and Bushwick in Brooklyn were also laid to waste in the seventies. Castells speculated that the breakdown of social order had its roots in the "ideological experiences of oppression" and the "social

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58 structure of exploitation" that was rampant in our cities. 33 The ex ploited vented their frustrations upon the support systems of the inner cities in the seventies. Street crime and riots were the most signifi cant factors in the breakdown of order in the cities. This breakdown of social order also had a major impact on the management of cities. Castells maintained that the social breakdown contributed to both the failure of the cities to manage their affairs and to the urban fiscal crisis. The fiscal crisis is, in Castells viev,, the result of the socialization of costs and privatization of profits that occurs in our system. Castells concluded that the fiscal crises of municipalities could eventually threaten the legitimacy of local governments and that policies must be implemented to overcome the crises. In Castells' view these policies would be the result of class conflict within the frame work of our social structure. The radical perspective can be perceived as an extension of liberalism's concern for social justice and equality. Radicals, however, do not believe that the legislation aimed at alleviat ing injustices went far enough. They believe that New Deal legislation in the United States probably saved the capitalist economic system; however, they do not believe that the system was worth saving. They contend that significant changes are needed in order to correct the structural contradictions manifested in the system changes they claim would bring about more social justice and equality. In the United States radical intellectuals have not been very successful in fundamentally altering the system. Workers in America have struggled and achieved a relatively high standard of living. The exploitation and poverty noted by Marx and Engels when describing the

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59 plight of the majority of industrial workers in England does not apply to industrial workers in America today. Revolutionary movements have in fact been more successful in agrarian societies than in the industrial society where Marx predicted the proletariat would seize con trol. China, Vietnam, Cuba, Ethiopia, Nicaragua, Angola, and Afgani stan are examples of agricultural societies that have accepted collec tive forms of government There is evidence in the United States that the proletariat, or workers, are not as radical as others, such as intellectuals or students. In the sixties the construction workers, or "hard hats,'' symbolized con servative thought. In 1972 large numbers of workers abandoned their traditional political home (the Democratic party) because the standard bearer was perceived to be "too liberal." In 1980 the proletariat, or working class, delivered a resounding victory to the conservative can didate, Ronald Reagan. Workers in America today have a vested interest in the continued prosperity of the nation. They have attained a decent standard of living through many years of struggle with management. Sweatshops in New York and the Ludlow massacre in Colorado are two examples indicating that the struggle has not been easy. It appears that,in response to a shift to the right by many workers, liberals are modifying their public positions. to the right. Neoliberalism refers to this shift Neoliberal Positions A new group of Democrats who claim to be the policical heirs of John F. Kennedy are gaining visibility in America today. This group has only recently been defined. They are represented by senators such

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60 as Bill Bradley of New Jersey, Gary Hart of Colorado, Paul Tsongas of Massachusetts, and Max Baucus of Montana; congressmen such as Timothy Wirth of Colorado, Richard Gephardt of St. Louis, James Florio of New Jersey, Leon Panetta of Monterey, California, Albert Gore of Tennessee, and Phillip Sharp of Indiana; governors such as Jim Hunt of North Carolina and Bruce Babbitt of Arizona; communicators such as economist Lestor Thurow of MIT, Morton Kondracke of The New Republic, James Fallows of the Atlantic Monthly, Charles Peters of The Washington Monthly; and even bankers such as Felix Rohatyn. 34 What the neolibe r als represent has only recently been defined. Neoliberals would like to free themselves of the albatross of dis credited social programs of the sixties. They would, however, like to retain an allegiance to the ideals of the sixties-compassion for the downtrodden, justice, fair play, and liberal ideals Neoliberals claim that they simply would like to practice pragmatic politics and that they will repackage the politics of good intentions in a manner that does not disrupt society A closer inspection of the platform and agenda of neoliberals reveals that in many respects their positions are not much different from the positions advocated by the New Right. Neoliberals wish to limit the role of government but do not call for the extent of contraction desired by the Right Congressman Richard Gephardt claimed that government has a duty to see that people are not "crushed by the economic forces of the free market," but he asserted that government has no business being in other areas, such as 35 health care.

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61 In terms of economic posture, neoliberals do not differ much from neoconservatives-both stress tax incentives, economic growth, and the encouragement of the entrepreneurial spirit. According to Charles Peters of The Washington Monthly, ninety percent of our bright young kids of the Seventies have gone to law school or business school. Instead of going into something that would create a new enterprise that would make the country move again, they are going into whoring. I don't want to lose to the Japanese.36 This nationalistic appeal is heard with equal clarity from the Right. Neoliberals, however, differ from neoconservatives in terms of priorities Neoliberal emphasis is almost exclusively on economic issues. Neoconservatives, many of them sociologists, insist that America's problems stem from a cultural breakdown. Economic problems are only a manifestation of the deeper cultural problems of the nation, in the view of these neoconservatives. Neoliberals recognize the need for more government-business cooperation. The Japanese concept of teamwork explained in the recent best seller Theory Z is extolled by neoliberals. 37 Emphasis is also placed on research and development and long-term rather than shortterm solutions to our economic problems. Fear that the traditional excellence of the United States is slipping is another thesis of the neoliberals. Neoliberals view traditional liberals such as Kennedy and Mondale as "paradigms of tired thinking," and view themselves as repre senting the new direction of liberalism in America. A neoliberal agenda emphasizes the following: 1) Compulsory National Service 2) Negative Income Tax 3) Central Economic Planning 4) Hi-Tech Industrialization

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5) Better Defense 38 6) Cooperative Regionalism. Implications of Ideology to Local Governments Does political ideology have a marked affect upon the budgetary behavior and socioeconomic conditions of cities? This is a question that will be investigated in greater detail in the following chapters. Some make the argument that there is no liberal or conservative method 62 of sweeping a street, teaching children, controlling crime, or budget ing Whether differences between liberal and conservative cities exist in regard to budgeting will be determined. Intuitively, one would expect policies in conservative cities such as Dallas and Houston to be dis tinctly different from policies in liberal cities such as New York and Boston This may be attributed to the fact that we expect leaders in conservative cities to rely upon the free market to a greater extent than leaders in liberal cities. One would expect, a priori, liberal cities to be characterized by h i gh per capita expenditures, high borrow ing, and high intergovernmental revenue. Presumably, these revenues and expenditures would be necessary and would be supported by the citi zens in order to fund the expansive type of government likely to be encouraged by liberal philosophies. Summary This chapter has delineated basic philosophical positions of the liberal political ideology. It has also discussed the historical evolu tion of liberal legislation. Both of these discussions are aimed at pro viding theoretical insights into why policy differences may exist be tween liberal and conservative cities. These differences will be empiri cally explored in later chapters.

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The discussion of the rise of the neoliberals demonstrates that ideology is indeed a matter of interest today. Just as the rise of 63 the New Right describes ideological foment, the rise of neoliberals represents the Democratic party's response to the electoral success of conservative candidates. Both of these movements indicate that the agenda of the nation has shifted to the right. If one believes the assumption that a shift in ideological values of the nation is occurring, one should also be concerned with the consequences of this shift. This study will evaluate the association between political ideology and specific public policy. Through this analysis we can begin to assess the policy implications of shifts in value priorities or shifts in ideologies. In the following chapters the association between political ideology and budgetary policy are empirically investigated. Whether different budgeting policies exist between liberal and conservative cities is explored. Specific categories of revenues and expenditures are compared between liberal and conservative cities. The extent of difference in these categories is empirically identified. The discus sion of New Right positions provides an indication of the salience of the conservative position today. There was a time when conservative ideology in America was considered dead. The election of 1980 and other elections, however, demonstrated that the Right has the ability to draw support from a broad spectrum of the electorate. Workingclass support of conservative Republicans particularly troubles Demo crats accustomed to the support of rank and file labor. Frustrations of coal miners, truckers, and farmers have been exploited by the New Right anxious to build a durable coalition.

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----------------------Notes 1 c. B. Macpherson, "The False Roots of Western Democracy," in Fred R. Dallmayr, ed., From Contract to Community (New York: Marcel Dekker, Inc., 1978), p. 17. 2 E. K. Bramsted and K. J. Melhuish, eds., Western Liberalism (London: The Chaucer Press, 1978), p. xvii. 3 Ib. d .. _1_., p. XVl 1. 4 Leon Baradat, Political Ideologies (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1979), p. 61. 5 Ibid., p. 62. 6 sramsted and Melhuish, p. 20. 7 Baradat, p. 94. 8 Ibid p 94 9 Ibid p. 96. 10 sramsted and Melhuish, p. 249. 11 saradat, p. 97. 12 Bramsted and Melhuish, p. 79. 13 Baradat, p. 97. 64 14 Asa Briggs, "The Welfare State in Historical Perspective," in Mayer Zald, ed., Social Welfare Institutions (New York: John Wiley & Sons), p. 62. 15 Michael Freeden, The New Liberalism: An Ideology of Social Reform (Oxford University Press, 1978), p. 20. 1611 Pensions and the Poor Law, 11 Nation, 16.3.1907, quoted in Freeden, p. 203. 17 Freeden, p. 222. 18 Ibid. 19 Ernest Mandel, An Introduction to Marxist Economic Theory (New York: Pathfinder Press, 1979), p. 9. 20 l bid., p. 13. 21 Manuel Castells, The Economic Crisis and American Societ (Princeton, N.J.: Princeton University Press, 1978 22 Frederick Engels, The Condition of the English Working Class in 1844 (London: 1962 Edition), pp. 46-47.

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23 David Harvey, Social Justice and the City (Baltimore: Johns Hopkins University Press, 1975), p. 34. 24 Ibid., p. 95. 27 Ibid p. 119. 25 1 bid. p. l 01. 26 Ibid., p. 101. 28 Michael Harrington, Decade of Decision (New York: Simon and Schuster, 1950), p. 186. 29 Ibid., p 199. 30 1bid., p. 203. 31 Manuel Castells, The Economic Crisis and American Societ (Princeton, N.J.: Princeton University Press, 1980 p 00. 32 Ibid., p. 208. 33 Ibid., p. 214. 34 Randall Rothenberg, "The Neoliberal Club, 11 Esquire, February 1982, p. 38. 35 Ibid p. 44. 36 Ibid, p. 45. 37 wiliam G. Ouchi, Theory Z (New York: Avon Books, 1981). 38 Rothenberg, p. 45. 65

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CHAPTER 4 NEXUS BETWEEN IDEOLOGY AND SOCIOECONOMIC VARIABLES Introduction The association between political ideology of cities and the experience of their socioeconomic variables is explored in this chapter. Causality is not determined, only distinctions based upon the difference of means between liberal and conservative cities. A number of socio economic variables are compared employing the difference of means,! tests. The overall health or economic viability of cities is also com pared utilizing bond ratings and changes in bond ratings as surrogate measures of municipal health. Prior to the investigation of socio economic distinctions between liberal and conservative cities, the development of the concept of ideology is discussed. Development of Concept of Ideology The term ideology was first coined by the French scholar Destutt de Tracy (1754-36), who used the term in his study of the Age of Enlight enment. 1 Oestutt de Tracy viewed ideology as part of a newly conceived science of ideas, which was to be the basis of a new social order. At the turn of the eighteenth century, Destutte de Tracy and his followers enjoyed great popularity. The influence of the movement was short lived, however. Napoleon dismissed the leaders of the movement as a group of tiresome theorists. In order to establish a strong central state, Napoleon decided to restore the influence of the Church rather than to support the influence of the II science of new ideas. 112 66

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Ideology was little heard of after the failure of de Tracy to reform France in the late eighteenth century. Marx resurrected the term, howeve~ in the mid-nineteenth century. His earliest systematic 67 use of the term occurrs in The German Ideology, which was co-authored with Frederick Engels. Marx and Engels viewed ideology primarily as a fabrication used by one group of people to justify their place in society. The idealized use of the term as a science for the improve ment of society had been abandoned. In the view of Marx and Engels, ideology was a concept that worked to benefit the ruling class by guiding the programs of the existing class structure. An ideology would cease to exist only when it no longer met the demands of its population. At that time a new ideology favoring the interests of a different class would emerge. Marx's Theses on Feuerbach presents a rough outline of his definitive work on ideology. 3 In this work, Marx emphasized the practical nature of thought and denied the importance of unpractical thinking. Marx maintained that only thought could change the world all else was trivial. Only by changing the world, Marx believed, could men destroy the society that alienated them from themselves. Aliena tion is a vital component of what Marx termed "false consciousness." Since in contemporary societies all that is naturally human is alienated from man, alienation of thought naturally follows. Alienation of thought leads thinkers to believe their works to be true; yet this is false consciousness or the individual's mistaken belief. 4 Marx observed that alienation of social thought was centered on the state instead of the real basis of alienation which was property. Political thought mistakenly centered upon state institutions rather

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than on problems arising out of private ownership of property. This political orientation was further evidence of the false consciousness of thinkers and the extent of their alienation. Only if thinking were directed at the real basis of society (property) would thought cease 68 to be alienated. False consciousness was said by Marx to explain the errors of previous thinkers and to provide an explanation of how socie ties are ruled : The false consciousness of a ruling class, its ideology, guides it according to the direction of its own interest. The ideology of the bourgeoisie, for example, is the programme of bourgeois expansion and power. The exponent in this programme is the polit ical economist, who tells the bourgeois how to expand his capital at the fastest possible rate. On Marx's understanding this programming is unobjectionable, until the economic and social system which is guided by the bourgeois ideology stops expanding . . When the forms of material production are no longer able to meet the demands of an expanding population, the social system is bound to be overthrown. But before this occurs, a new ideology, one setting forth a programme 5 favourable to the interests of a different class, will emerge. In short, Marx viewed ideology as an idealized justification for ruling-class control, which meant control of all means of production goods as well as ideas New ideologies would take hold only when mate rial production was no longer able to meet the demands of the population. In this manner the world would follow the history of material change, not the logic of thought, as Hegel claimed. Marx was critical of all philosophy and what he termed the delusions of absolute idealism. A prerequisite for Marx's "socialist science" (which would be led by the proletariat) would be what Marx termed an "unmasking of human self alienation. 116 Mar x 's theory of ideology was assigned this task. Marx maintained that once the unmasking process had been accomplished, all would be clear. He stated that "it is the task of history, therefore,

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once the other world of truth has vanished [false consciousness], to establish the truth of this world. 117 Karl Mannheim, another important contributor to the development of the concept of ideology, was in agreement with Marx in that he be lieved all thinking was socially determined. He believed, however, that Marx's writings were no more free from ideology (false conscious ness) than the works Marx attacked. Marx, he claimed, used false con sciousness to discredit opponents but did not apply the same criterion to his own works. 69 Mannheim claimed that men's thoughts are in accordance with their class positions, and that the task of intellectual criticism is to understand and benefit from the ramifications of this insight. Mann heim concluded that no idea was strictly congruent with reality, all ideas being more or less pathological expressions of social discontent. He distinguished between what he termed utopies and ideologies, calling the more incongruous thoughts, the ones which are so incongruous that they prevent the thinker from acting effectively, ideologies. The more effective ones, the ones which enable men to break through the status quo and satisfy the needs of the thinker, are called utopias Mannheim admits that a little insecurity and maladjustment in a class is to be expected, for then the class concerned will express its grievance in the form of what he calls a utopia and so overcome its problems.8 Mannheim feared that unmasking false consciousness might prevent utopian responses to pressing problems. When this unmasking occurred, groups shorn of their utopia might react to the situation not by refer ence to their true position, but by taking refuge in what was perceived as an intractable pathological response or ideology. Both Mannheim and Marx laid the foundation for an understanding of ideology. Since the time of Marx, ideology has been utilized as a

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70 means of describing class conflict and philosophical beliefs. It also has been viewed as a means of studying how ruling classes have justified their positions. Perhaps most important, ideology provides a means of investigating historical change. Dialectical View of Ideology Ideology has been utilized as a means of understanding large changes in the history of man. Marx 1 s concept of dialectical material ism is fundamental to the Marxian understanding of history. Ideology plays a large part in this dialectic, or change, that is ever occur ring. The concept of the dialectic was borrowed by Marx from George Hegel. Hegel developed a theory of history based upon the concept of change in which the world was progressing toward an ideal or goal that was predetermined by God. 9 According to Hegel, people should not try to adjust the progress of history-which he viewed as beyond their power and predetermined by God. People, he wrote, would find truth only when they accepted their place in history, or in the Devine plan. Marx was not in accord with this view of history but adopted Hegel 1 s idea of the dialectic process. Hegel believed that the dialectic was a devinely created force by which the Idea [history] was to unfold. He believed that any reality is two things. It is itself, and it is part of what it is becoming. Thus the only consistency Hegel saw was change itself. He called this the power of the negative. To Hegel history was simply the process of change brought on by struggle. In this process no truth was ever lost since today 1 s reality would become part of a more perfect truth tomorrow. IO Marx changed Hegel 1 s dialectic in order to suit his own view of historical progress. While Hegel argued that the dialectic was a struggle between devinely inspired ideas which culminated in change,

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Marx postulated that the dialectic was a struggle among worldly (not Godly) interests. Marx, therefore, is said to have 11 stood Hegelism upon its head 11 : 71 Marx believed that the human conflict was caused by social class differences. In addition, he held that the struggle that occurred at the end of one historical era and led to the dawn of a new one was a struggle between opposing social classes. Further, he believed that humanity had passed through four historical stages and was about to enter its fifth and final era. 11 The first era of human history was said by Marx to be based on primitive communism where no occupational specialization or division of labor existed. As specializations developed, they led to strife and conflict, with empire resulting from the strife as the second dominant political system. Slavery was said to have been the economic system that supported the political system of empire. Feudalism emerged as the political-economic system toppling the old system of empire. Bourgeois democracies were the basis of the political systems replacing feudalism. Capitalism was the economic system supporting the bourgeois democra cies. The proletariat, or the factory workers, were to be the vehicle for the creation of the fourth historical era. This fourth era would emerge as the end product of the final dialectical struggle-all classes but the proletariat would be eliminated; the source of all human strife would disappear; and a new, classless society holding its goods in common would emerge. In this society all people would find peace and happiness. Whether one adheres to the dialectical view of history or not, it is fairly clear that some ideological change appears be be occurring in America today. For the purpose of this study, the impact of this change on local governments is of primary concern and will be evaluated.

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First, however, two procedures must be implemented: (l) ideology must be operationalized and transformed from a theoretical concept into an objective value, and (2) cities must be characterized according to ideology so that their behavior can be contrasted. Empirically Characterizing Cities by Ideology 72 The twenty largest cities in the United States were typologized as either liberal or conservative 12 by use of rankings by the Americans for Democratic Action (ADA). These ADA rankings were assumed to repre sent an independent, nonpartisan measure of ideology. The ADA was organized in 1947 by a group of political leaders, trade union officials, and university people. Its purpose was to serve as a bulwark of liberal anticommunism, 13 and it is dedicated to work for the nomination and election of liberal candidates to public office, regardless of party label. The Americans for Democratic Action is established to "seek out, propose and support candidates who stand for regorous liberal programs_,J 4 As stated in the introduction, a number of assumptions were made in typologizing cities. Among them are (l) congressmen and congress women of a particular municipality are representative of the political, cultural, or political ideology of that municipality, and (2) Americans for Democratic Action can accurately identify the ideological posture of legislators. Evidence exists that ADA scores accurately reflect the ideology of the members of Congress and correlate highly with other indexes that claim to describe ideology. A strong negative correlation exists between the ADA measure and conservative measures of ideology. Those

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with high scores on the ADA scale rank low on the conservative scale and vice versa. It is assumed that the key votes chosen by the ADA represent policies with an ideological frame of reference. 73 Through ADA rankings, a measure of ideological preference for each city was attained. For example, New York City is represented in the House by districts 7-22. The representative from each of these districts is ranked by the ADA with regard to his or her correspondence with liberal positions on certain values. By averaging the scores of all of New York's representatives, an ADA score for the entire city can be calculated. This procedure was carried out for the other cities and arrayed from highest to lowest. The highest cities on the ADA rank ing were designated 11 liberal 11 cities while the lowest cities were desig nated 11 conservative 11 cities. Appendix A shows ADA rankings for each district in the cities under review; Table 4-1 arrays the average ADA ranking for all of the cities. The cities were dichotomized into two categories in Table 4-1. the cities with the highest ADA scores (Baltimore, San Francisco, Los Angeles, New York, Cleveland, Memphis, Boston, Detroit, Milwaukee, Chicago, Philadelphia, and San Jose) were characterized as liberal; the others were characterized as conserva tive. The majority of the conservative cities were located in the sun belt. Los Angeles and Memphis were the only liberal sunbelt cities. Columbus and Indianapolis were conservative cities not located in the sunbelt. The salience of political ideology relative to region is dis cussed below.

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74 Table 4-1 Ideological Ranking of Cities by ADA Scores City ADA Score Baltimore 91 San Francisco 90 Los Angeles 85 New York 80 Cleveland 80 Memphis 79 Boston 77 Detroit 74 Milwaukee 71 Chicago 68 Philadelphia 67 San Jose 66 Liberal Houston 60 Conservative San Diego 51 San Antonio 36 Indianapolis 31 New Orleans 25 Dallas 18 Columbus 13 Phoenix 7

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75 Ideological Versus Regional Salience Kirkpatrick Sale's Power Shift stirred a great deal of attention in discussing the growth of the sunbelt and the decline of the snowbelt. Sale's contention, simply stated, was that the sunbelt was experiencing growth while the snowbelt or frostbelt was in a state of decline. Wat kins and Perry disputed some of Sale's contentions. They claimed that there was poverty in both areas but that the response to the poverty differed dramatically between the two areas. In the north, poverty was addressed through governmental assistance and was a source of fiscal crisis in cities such as New York. In the south, poverty was a source of cheap labor. Poverty, measured by the Bureau of Labor Statistics, was greater in the south; yet the poor of the south were much more likely to be working-:--for a subsistence wage-and paying taxes, while the northern poor were much more likely to be unemployed. 15 Culture or political ideology may begin to explain this phenomenon. Implicit in Watkins and Perry's analysis is the contention that regional differ ences may be linked to policies toward the poor. There is another dynamic at work beside sunshine. Thomas Dye tested the relationship between economic growth and average annual daily temperature. Dye found that the sunbelt phenomenon was grossly exaggerated. Warmth and sunshine in and of themselves were not very good predictors of economic growth. 16 Other studies have singled out different conditions as prerequi sites for growth. Robert T. Holt and John E. Turner acknowledged the importance of political conditions. 17 They viewed the attitude of the government as a crucial determinant of economic growth. The present study

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76 focuses upon political ideology and investigates the linkage between political views (measured by votes in Congress) and various socioeconomic measures of growth and general helth. As Holt and Turner, and Watkins and Perry, infer, political conditions may be very relevant influences on social and economic conditions. In the present study the socioeconomic health of cities is explored by an investigation of bond ratings and the performance of individual socioeconomic variables. Bond Ratings, 1981 The economic health of a city is reflected in the bond ratings of the municipality. Ratings are initially determined by investment ser vices such as Moody's or Standard and Poors. After evaluating the pros pects of repayment and the risks of default, bonds are given a rating ranging from Aaa (best quality) to C (lowest rated class), While bonds are rated by investment houses, the market eventually determines the worth of the security. If a bond has been rated too low, interest rates will be very attractive to investors wishing to reap a good return on a secure investment. These investors will buy the bond, increasing the demand and making the security sell at a premium. Future issues will be floated at a lower interest rate reflecting this market interest. If, on the other hand, the bond has been rated too high, lack of inter est will force the price of the bond down, increasing the rate of in terest until it eventually finds buyers. Moody's ratings for municipal bonds are summarized as follows: Ass Best quality Aa High quality A Upper medium grade

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77 Ba Speculative B Lacks characteristics of desirable investment Caa Poor standing Ca Speculative in a high degree C Lowest rated class. Table 4-2 describes the bond ratings for liberal and conservative cities over a period of twenty years. The chi-square test was employed to determine whether statisti cally significant differences existed between the bond ratings of liberal and conservative cities. Table 4-3 lists the latest obtained and expected frequencies of bond rating in liberal and conservative cities. Since the expected frequencies of cells were less than 10, Yate's correction had to be employed. No statistically significant differences between bond ratings of liberal and conservative cities were found to exist at the .01 or .05 level of confidence. Chi-square value calcula tions are shown in Appendix B. The bond rating data indicate that in 1981 investors had more confidence that conservative cities would repay their obligations than they had that liberal cities would do so. The economic health of con servative cities appeared to be sounder in 1981, but statistical dif ferences were not found at the .01 or .05 levels. Changes in Bond Ratings Over Time The trend of bond ratings over the past twenty years was also in vestigated. A statistically significant difference between trends in liberal and conservative cities was discovered at the .05 level of confi dence. More of the conservative cities improved ratings between 1961

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78 Table 4-2 Municipal Bond Ratings, 1961 and 1981 City 1981 Rating 1961 Rating Baltimore San Francisco Los Angeles New York Cleveland Memphis Bos ton Detroit Milwaukee Chicago Philadelphia San Jose Houston San Diego San Antonia Indianapolis New Orleans Da 11 as Columbus Phoenix Libera 1 Cities A Aa Aaa B Caa Aa Baa Ba Aa A Baa Aa Conservative Cities Aaa Aa Aa Aaa A Aaa Aa Aa A Aa Aa A Aa Aa A A Aaa A A Aa A A A Aaa A A Aa A Source: Municipal Year Book 1981 (Washington, D.C.: Inter national City Management Association, 1981), pp. 12-44; John Moody, Mood 's Munici al and Government Manual (London: Moody's Investors Service, Ltd., 1961

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------------------and 19 8 1. Table 4-4 shows the obtained and expected frequencies of changes in bond ratings. Table 4-3 Bond Ratings, 1981: Speculative and Upper Grade B or below Liberal Cities Conservative Cities Liberal Cities Conservative Cities A or above (9) 7 (6) 8 15 Table 4-4 Changes in Bond Ratings: Improve (3.5) l (2.5) 5 6 (3) 5 12 (2) 0 8 5 20 1961-81 Worsen (3.5) 6 12 ( 2. 5) 0 5 6 12 79

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80 Five conservative cities improved their bond ratings while no conserva tive city had a worsening of its rating. One liberal city improved its rating while in six liberal cities the ratings fell. Appendix B com putes the chi-square values for the 2 x 2 table described above. We can infer from Table 4-4, at a 95 percent level of confidence, that be tween 1961 and 1981 conservative cities were more likely to experience improvements in their economic viability, expressed by bond ratings. This discussion of bond ratings describes the bond market's evalua tion of the cities' fortunes. Cities were evaluated in terms of inves tor confidence in both economic well-being and their ability to repay loans. Individual socioeconomic trends were lost in this analysis. The following discussion investigates specific socioeconomic indicators of economic well-being in liberal and conservative cities. Socioeconomic Indicators Specific socioeconomic indicators of cities were investigated. The following indicators were compared between liberal and conservative cities: l. Percent white population 2. Percent elderly population 3. Percent of population with four years of high school or more education 4. Percent of population below the poverty level 5. Median income 6. Serious crimes per 100,000 people. These socioeconomic indicators were compared both over time and at one point in time. Data from the 1970 census were the latest available data.

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Appendix C presents the performance on these socioeconomic vari ables of all liberal and conservative cities. In Appendix D the stan dard error of estimate is computed, a figure that is necessary for the calculation of! scores used in determining significant differences between means. Table 4-5 summarizes the differences between liberal 81 and conservative cities for each of the variables listed above. The data do not support the contention that in 1970 liberal cities were in a worse condition than conservative cities. No statistically signifi cant difference was found between liberal and conservative cities for any other variable. Upon careful investigation of the data, however, it was dis covered that one city in each group was an anomaly. San Jose (in the liberal group) and New Orleans (in the conservative group) exhibited behavior which was different from their group. In general, liberal cities experienced characteristics of decline, but San Jose experi enced robust growth. In terms of population change, the percent white population, percent elderly population, change in percent elderly popu lation, change in total employment, education, poverty, value added by manufacturing, and retail sales, San Jose'e behavior was closer to the behavior of conservative cities than to the behavior of liberal cities. A similar situation existed with respect to New Orleans. While most conservative cities experienced characteristics of growth, New Orleans' data were characteristic of decline. New Orleans was an outlier of the conservative group in terms of population growth, per cent white population, change in white population, elderly population, change in elderly population, change in total employment, change in

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Table 4-5 Differences in Socioeconomic Variables Between Liberal and Conservative Cities Four Years High School Below Serious White Elderly or Higher Poverty Median Crime/ Population Population Education Level Income 1 OOOK 1970 1970 1970 1970 1969 1970 Mean of Liberal Cities 70.8 % 10.8 % 48.8 % 11. 1 % $9,788 8,469 Mean of Conservative Cities 80.0 8.5 53.4 11. 8 9,464 8,709 Significant No Yes No No No No Difference (. 05) t Score -1. 5 2.6 -1.02 -.4 7 -.2 Source: U.S. Department of Commerce, County and City Data Book 1977 (Washington, D.C.: U.S. Govern ment Printing Office, 1978). U.S. Department of Commerce, County and City Data Book 1962 (Washington, D.C.: U.S. Government Printing Office, 1963). (X) N

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value added by manufacturing, change in retail sales, change in median family income, education, and poverty. 83 It has always been the case that unexpected findings may be of great value. Such is the case with respect to San Jose and New Orleans. While San Jose was determined to be a libaral city, based upon its vot ing record, it has experienced tremendous economic growth. New Orleans' voting record firmly established it within the conservative group; yet the city had not experienced any of the growth associated with conser vative cities. An explanation of why these two cities are anomalies is beyond the scope of this study. This study only identifies the situa tion and serves as a source of future research. Larry Mayer of the University of Pennsylvania stated i.n his lec tures at the Inter-University Consortium of Political Science Research (ICPSR), in 1978, that in order to get the least distorted picture from data, it is necessary to omit extreme outliers. By dropping these extreme outliers, a better picture of the swarm,or majority,of the data is obtained. This was done in regard to the extreme outliers San Jose and New Orleans. Table 4-6 compares variables after the two outliers (San Jose and New Orleans) were omitted. When the cities of San Jose and New Orleans were omitted from analysis, greater differences between the liberal and conservative cities were discovered. In contrast to the previous analysis, when only a difference between the elderly populations of the liberal and conservative cities was discovered at the .05 level of confidence, dif ferences were discovered at the .01 level of confidence for both the proportion of the white population and the proportion of the elderly population.

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Table 4-6 Differencesin Socioeconomic Variables Between Liberal and Conservative Cities (New Orleans and San Jose Omitted) Four Years High School Below White Elderly or Higher Poverty Median Population Population Education Level Income 1970 1970 1970 1970 1969 Mean of Liberal Cities 68. 7 % 11. 2 % 47.3 % 11.6 % $9,662 Mean of Conservative Cities 83.6 8.2 55.0 l 0. 4 9,753 Significant Yes Yes No No No Difference (. 01 ) ( 01 ) t Score -2.98 5.0 1. 8 .9 -.2 Serious Crime/ lOOOK 1970 8,518 8,938 No -.3

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85 Even greater population differences were discovered when changes in the socioeconomic conditions of the cities were investigated. Growth in the following variables were delineated: 1. Size of city 2. Minority composition of city 3 Elderly composition of city 4. Median income 5. Total employment 6. Value added by manufacturing 7. Total retail sales. These variables describe changes in both demographic and economic condi tions It is assumed that increases in the proportion of minority el derly populations, as well as reductions in the absolute size of cities, are inimical to a city's "health," and that increases in median income, total employment, value added by manufacturing, and retail sales are positive indicators of a city's "health." Table 4-7 describes changes in socioeconomic measures of municipal health over time when all cities were included. Change in white popula tion was the only category where statistically significant differences were found to e x ist between the two groups of cities. This situation changed considerably, however, when San Jose and New Orleans were dropped from the analysis. Table 4-8 describes the relationships when these cities were excluded from the analysis Excluding the two cities from analysis considerably changed the picture. Si x of the seven variables shown in Table 4-8 were signifi cantly different. These differences occurred for two reasons. First,

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Table 4-7 Differences in Growth of Socioeconomic Variables Between Liberal and Conservative Cities, 1950-Y : O Socioeconomic Variables Total White Elderly Total Median Value Added Retail Population Population Population Employment Income by Manufacturing Sales Mean of Liberal Cities +41.9 % -17.9 % +35. 1 % +29.0 % +178.3 % +110.3 % +87.2 % Mean of Conservative Cities +134. 5 -7.3 +19.3 +188.0 +187.4 +412.3 +206.4 Significant No Yes No No No No No Difference (. 05) t Score -1. 3 -2.6 1. l 1. 2 l -1.8 -.7 Source: U.S. Department of Commerce, County and City Data Book 1977 (Washington, D.C.: U.S. Govern ment Printing Office, 1978); U.S. Department of Commerce, County and City Data Book 1962 (Washington, D.C.: U.S. Government Printing Office, 1963).

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Table 4-8 Differences in Growth of Socioeconomic Variables Between Liberal and Conservative Cities, 1950~70 (New Orleans and San Jose Omitted) Socioeconomic Variables Total White Elderly Total Median Value Added Population Population Population Employment Income by Ma r:i ufacturi ng Mean of Liberal Cities -2.3 % -19.2 % +42.4 % -1.0 % +176.2 % +82.3 % Mean of Conservative Cities +154.0 -5.6 +14.8 +138.2 +190.0 +450.8 Significant Yes Yes Yes Yes No Yes Difference (. 01 ) ( 01 ) (. 05) (. 05) (. 01 ) t Score -3.3 -3.5 2.3 -2.7 -1. 7 -1 l. 4 Retail Sales +59.8 % +224.3 Yes (. 01 ) -4.6

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88 omitting the two outlying cities increased the difference between the means of liberal and conservative cities. Each of the anomalous cities had the effect of reducing differences between the two groups. Second, the variance and standard error of difference was reduced by omitting these cities from analysis. This had the effect of increasing l scores and the likelihood of statistically significant differences. Summary In this chapter the development and historical importance of the concept of ideology were discussed. Ideology was not dealt with ex clusively as a theoretical concept. It was operationalized,with munici palities being categorized as either liberal or conservative. Of the cities under investigation, twelve were identified as liberal and eight were categorized as conservative. Liberal and conservative municipalities were compared on a number of measures. Bond ratings-said to provide an indication of the eco nomic health of cities-of liberal and conservative cities did not dif fer significantly in 1981. If the sample had contained a larger number of cities, however, bond ratings of conservative cities would have been statistically higher than those of the liberal cities. Greater differ ences existed in terms of changes in bond ratings over a twenty-year period. During this time, conservative cities were statistically more likely to improve their bond ratings, while the bond ratings in liberal cities were likely to worsen. Bond ratings provided an indication of gross evaluations of munici pal health. Socioeconomic measures delineated in greater detail the

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---------------------89 actual changes that occurred in liberal and conservative cities. Sta tistically speaking, significant differences were found between liberal and conservative cities. When socioeconomic variables were compared at one point in time, it was discovered that the liberal cities had a significantly higher proportion of elderly people than did the conserva tive cities. In terms of change, it was discovered that the white popu lation in the liberal cities declined at a faster pace than it did in the conservative cities. Both of these measures indicate that liberal cities may be in a greater state of decline. Differences in the other areas, however, were not discovered. Upon closer investigation, it appeard that two cities did not conform with the others. San Jose was liberal politically but in terms of demographics and economics was congruent with the most vibrant of the conservative cities. Similarly, New Orleans was conservative politi cally but in terms of socioeconomic variables was not unlike the liberal cities. This, in and of itself, is an interesting finding. Future research is needed before any conclusions can be reached explaining this situation. Because of the distorting effects of these cities, they were excluded in the comparison of socioeconomic variables made between the two groups of cities When these two cities were omitted, it was dis covered that greater differences existed between the liberal and con servative cities Differences between liberal and conservative cities, when outliers were omitted,are summarized as follows:

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Liberal Cities Lower proportion of whites to total population Higher proportion of elderly to total population Slower population growth Higher declines in white composition of city Greater increase in elderly population as a percentage of population Lower growth in total employment Lower growth in value added by manufacturing Lower growth in retail sales Conservative Cities Higher proportion of whites to total population Lower proportion of elderly to total population Faster population growth Lower declines in white composition of city Smaller increase in elderly population as a percentage of population Higher growth in tot3l employment Hi9her growth in value added by manufacturing Higher growth in retail sales 90 If the two cities were not omitted, differences would exist only in the proportion of the elderly in the total population and the change in the ethnic composition (proportion of whites) of the total population. When the two cities are omitted, it is evident that distinctions exist be tween liberal and conservative cities on a wide number of socioeconomic variables. Notes 1 H. M. Drucker, The Political Uses of Ideology (New York: Harper & Row Publishers, Inc., 1974), p. 3. 2 Ibid., p. 13. 5 Ibid. 8 rbid., p. 21. 3 Ibid., p. 17 6 Ibid. 4 Ibid., p. 18. 7 Ibid. 9 Leon Baradat, Political Ideologies (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1979), p. 156.

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91 lOibid., p. 147. 12 washington, D.C. is in the top twenty but is excluded from this analysis because its representative may serve on committees and can speak on the House floor but may not vote. Therefore, his ADA score cannot be obtained. The 21st largest city, New Orleans was substituted in Washington's place. 1311 1\mericans for Democratic Action," Encyclopedia Americana, Vol. 1 (Danbury, Conn.: Grolier Inc., 1980), p. 736. 14 clifton Brock, Americans for Democratic Action: Its Role in National Politics (Washington, D.C.: Public Affairs Press, 1962), p. 18. 15 David Perry and Ira Sharkansky, Urban Politics and Public Policy (New York: W. W. Wilson Company, 1979), p. 74. 16 Thomas Dye, "Taxing Spending and Economic Growth in American States," Journal of Politics (November 1980), p. 1098. 17 Ibid.

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CHAPTER 5 NEXUS BETWEEN IDEOLOGY AND BUDGET VARIABLES Introduction The question of the effect of political ideology on public policy is a matter of great concern, which is particularly relevant today due to today's apparent state of ideological transition. The values and philosophies of the Reagan administration differ greatly from the values and philosophies of the New Deal coalition. This chapter explores the effect that ideology and the new conservatism may have had on budgetary policies. The values and ideologies of the Reagan administration appear to be in line with the philosophies expressed by the Republican p arty before the Great Depression. This Republican doctrine encourages belief in economic individualism, and that rags can be converted into riches by hard work. These beliefs provided capitalism with its underpinning for almost a century. During this time, the notion that the federal government should assume responsibility for poor relief seemed blasphemous. The doctrine of nonfederal intervention in poor relief was articu lated by President Franklin Pierce back in 1854, 1 and would be observed until the administration of Franklin Delano Roosevelt. Efforts to obtain federal relief for the unemployed during the depressions of 1892-93, 1914, and 1921 failect. 2 92

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93 Franklin Delano Roosevelt was able to forge a new coalition which differed ideologically from the preceding administrations. Roosevelt was able to unite the lower-middle classes, ethnic groups, and industrial workers of the urban East with the farmers of the west and south. This coalition defeated the entrenched powers and maintained control of the White House for a period of twenty uninterrupted years. Policies of the Roosevelt administration differed greatly from the policies of his predecessor, Herbert Hoover, \-.Jho attempted to assist bankers, the railroads, and farmers in the early days of the Depression. These groups were said to have made America run before and would make America run again. In contrast to Hoover's policy of stimulating entre preneurial interests, Roosevelt advocated federal public works, unemploy ment insurance, and regularization of production as a cure to the Depression. 3 His programs were intended to build from the bottom up in contrast to the philosophy of building from the top down, or as in today's jargon, allow the wealth to trickle down. Philosophies of New Deal Democrats have come under attack in recent years. Popular conservative writers such as Milton Friedman and George Gilder have criticized many of the liberal programs that grew out of the Roosevelt period. The rise of the New Right and the election of the conservative Reagan provide edidence that disenchantment exists with liberal policies of the past. Ronald Reagan repeatedly distanced himself from the policies of the "liberal" Democrats. In a televised address to the nation, Reagan declared that Democrats wish "more and more spending" while he believed that "we should have less spending, less taxes, and more prosperity. ,4

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94 While this statement is a simplification, it does lay out some of the deep-seated philosophical differences between liberal and conserva tive ideologies. Differences between ideologies were also delineated in Reagan's inaugural address in which he declared that it was time to check and reverse the growth of government which showed signs of having grown beyond the consent of the governed. 5 Reagan also applauded the energy and individual genius of individual free men. He promised to restore the balance between various levels of government, revitalize industry, and lighten punitive tax burdens. Reagan's message, that government is not the solution to our prob lem but the problem itself, flew in the face of liberals. A totally new posture and orientation based upon conservative philosophies assumed the mantle of power in Washington. This chapter explores the effects of both conservative and liberal ideology on budgetary policy at the local level. Specific budget patterns are identified and explored from the perspective of political ideology. This can serve as a tool of policy analysis, assisting the prediction of policy behavior based upon ideology. In this chapter budgetary behavior will be explored under liberal and conservative philosophies. Whether or not differences exist between the two political perspectives is of interest. Before municipal budgeting policy can be explored, howeve~ some methodological problems must be addressed. Problems of Comparability A myriad of overlapping local jurisdictions and fuzzy areas of responsibility have created a situation where a great deal of comparative urban analysis just does not exist. In 1962, there were over 91,000 local

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95 governments, including 3,043 counties; 17,997 municipalities; 34,678 school districts; and approximately 36,000 townships, villages, and assorted special districts. 6 The different types of government varied in service responsibility and opportunity to tax. In New York City, for example, public welfare and education spending are assumed by the city itself. In other cities these functions are assumed by other jurisdic tions. Astrid E. Merget stated, Expenditure patterns across cities are especially tricky to interpret. Cities vary greatly in the scope of service functions they render. In part, a different service functions reflect a critical variable in municipal finance: state assignments, con stitutions, and statutes call upon cities to perform various kinds of services Even within a single state, responsibilities across cities may be incomparable. At times, overlapping country or special district governments and, in fact, even the state itself may directly provide some services to residents of a jurisdiction, where in other municipalities they may be the exclusive responsi bility of a city government. Comparisons over time and across cities should examine only comparable functions.? Enumeration of the problems discussed by Sharkansky and Merget, however, should not preclude research in the area of comparative fiscal analysis. Research decisions rules will be made where several problems of noncom parability exist. Comparability will be achieved thorugh these adjust ments. In order to compare budget variables, they must be made comparable between cities Specific variables are contaminated due to the fact that services may be assumed by one city and not assumed by others. For example, one would expect per capita general expenditures to be higher in a city that assumes a large number of services than in a city such as Phoenix where the city only provides minimal levels of services. The

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96 effects of noncomparable services will be corrected for through applica tion of the following decision rules. Decision Rules Gene r al Expenditures In order to make general expenditures comparable, expenditures for noncomparable functions such as education, public welfare, health and hospitals, and housing were subtracted from general expenditures. Differ ences in the assumption of these services make comparison of general expenditures between cities impossible if the general expenditures are not adjusted. Revenues Intergovernmental revenue. Intergovernmental revenue earmarked for noncomparable social functions such as education, public welfare, health and hospitals, and housing can be identified In this study, aid earmarked for these services is subtracted from total aid received by state and federal sources. Intergovernmental revenue then becomes comparable between cities that assume different levels of social services. Charges and miscellaneous revenue Charges obtained from noncom parable services such as housing hospitals, and education are ascertain able. These figures are subtracted from the total revenues obtained from charges and miscellaneous revenue in order to adjust the data. Long term debt Debt assumed for functions such as education and hospitals can be identified and is subtracted from the total long-term debt assumed by municipalities. In this manner the effect of noncompar able functions is deleted.

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97 Total taxes. Total taxes are adjusted by (1) calculating costs of noncomparable services such as education, public welfare, health and hospital, and housing functions; (2) subtracting intergovernmental revenue earmarked for these services from the total costs of these services; and (3) assuming that after intergovernmental revenues have been accounted for, the costs of noncomparable services are borne by taxes and charges and miscellaneous revenue. The proportion of these costs attributed to taxes (i.e., ~he proportion of taxes plus charges attributed to taxes) is computed and the resulting ratio is multiplied by the costs for the noncomparable services, which is subtracted from total taxes. General revenues. Intergovernmental revenue, charges and miscel laneous revenue, and total taxes are the components of general revenues. Decision rules explaining how they are to be adjusted for noncomparable services have already been delineated. General revenue can be adjusted by summing these three components. These decision rules will permit comparability between the revenue and expenditure categories mentioned above. Adjustments are necessary since a wide diversity in numbers of services assumed by the twenty largest cities exists. Appendix E lists the cities under investigation and the types of services that are assumed by each. Per capita revenues and expenditures in liberal cities will now be compared with the per capita revenues and expenditures in conservative cities. Comparison of per Capitized Budget Variables by Ideology Per capitized revenue and expenditure variables are compared by political ideology. If political views are transferable into budget

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98 activity, it would be expected that per capita general expenditures and per capita taxes would be higher in liberal cities than in conservative cities even after adjustements. It is assumed that liberal cities are less resistant to large-scope government than conservative cities. Appendix F lists per capita revenues and expenditures for all cities. General expenditures, intergovernmental revenue, taxes, debt, and general revenues have been adjusted in accordance with the decision rules. Only expenditures assumed by all cities are considered. Table 5-1 lists the mean adjusted reveneues of liberal and conservative cities; t scores and significance are also listed. It is important to remember that Table 5-1 reflects adjusted per capitized revenues. For example, if adjustments were not made for non comparable services, per capita intergovernmental revenue in New York would amount to $1,956 instead of the $341 listed in Appendix C. After adjustments were made, no differences were found in per capitized mean revenues for the following categories: charges and miscellaneous revenue, taxes, and debt. Differences were found in regard to general revenues. This difference can be directly traced to intergovernmental revenues. Even after adjustments for noncomparable services were made, total intergovernmental revenues and federal intergovernmental revenues differed between liberal and conservative cities at the .05 level of confidence. Even greater differences were discovered when state inter governmental aid was explored. A far greater percentage of the total aid given to liberal cities was contributed by states. States with conservative cities contributed a far lower proportion of intergovern mental aid. This conclusion was surported at the .01 level of confidence.

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Table 5-1 Per Capita Revenues in Liberal and Conservative Cities, FY1978-79 Charges and Intergovernmental Revenue Percent MiscelState to laneous Total Federa 1 State Total Aid Revenue Taxes Revenue Debt Liberal Cities $293 $125 $ 168 55 % $129 $174 $563 $529 Conservative Cities 158 64 50 26 99 147 391 605 Significant Yes Yes Yes Yes No No Yes No Difference (. 05) (. 05) ( 01) ( 01) (. 05) t Score 2.65 2.35 2.95 3.22 91 77 2 82 -.6 Source: U.S. Department of Commerce, City Government Finances 197879 (Washington, D.C.: U.S. Government Printing Office, 19 8 0)

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100 A number of explanations can be offered as to why liberal cities secured higher levels of per capita intergovernmental revenue, everi after adjustments for noncomparable services were made. The level of profes sionalism of a municipality may explain why some cities are able to attract large amounts of outside revenue and others are not. Grantsman ship has become very technical and, as opposed to revenue sharing, the receipt of a grant is by no means automatic. Cities must hire staff and decide to pursue aggressively the writing of grants in order to qualify for payments. The decision to hire a professional staff and engage in the active pursuit of state and federal money may be a function of ideology and politics. Conservative cities may be reluctant to accept federal aid if there is a matching requirement and if the influence of the federal government in local affairs would increase. Deil Wright stated that while it may be politically and economically unwise to turn down federal aid, governors are not unaware of restraints placed upon them by categorical grants. 8 In the recent past, liberal cities were more amenable to the objectives of the federal government. We can assume that they were not adverse to tapping into the federal treasury. Liberal cities also often had great political power. A city such as Boston would have its interests looked after by leaders of Congress such as Edward Kennedy and Tip O'Neil. Table 5-2 compares expenditures of liberal and conservative cities. Categories of expenditures such as education and public welfare have been omitted from the analysis. Only commonly assumed categories of expenditures will be investigated in this table.

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101 Table 5-2 compares similar functions in liberal and conservative cities. General expenditures in liberal cities were significantly higher than expenditures in conservative cities, even after adjustments were made for dissimilar services. In terms of individual expenditure categories, two overhead expenditures (financial administration and general control) were significantly higher (at the .05 level) in liberal cities. Per capita police expenditures were also significantly higher (at the .01 level of confidence) in liberal cities. This fact may seem somewhat strange considering the popular perception of conservative cities being associated with large and powerful police forces. The finding of higher police expenditures in liberal cities may be partially explained by the higher costs in liberal cities for all expenditures. Liberal cities also tend to assume greater numbers of social welfare services than conservative cities. This may influence the perception of lower emphasis on police expenditures. For example, New York City spends more per capita for police expenditures than any of the conservative citiesr Pblice expenditures in New York, however, are minor compared to the enormous city expenditures for education and public welfare. The distribution of expenditure categories is also delineated in Table 5-2. The relative distribution of funds can be compared between liberal and conservative cities for these expenditures. When only these similar expenditures are compared, it is discovered that liberal cities expend a greater proportion of their funds for police protection than conservative cities (20 % compared to 18 % ). Conservative cities expend higher proportions of their funds for highways (12 %

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Table 5-2 Per Capita Expenditures in Liberal and Conservative Cities, FY1978-79 Liberal Cities Conservative Cities Significant Difference t Score Distribution in Liberal Cities Distribution in Conservative Cities Gen. Exp. Pol. Fire San. $551 345 Yes (. 05) 2.6 $94 $44 59 32 Yes No (. 01 ) 3.2 2.0 20 % 10 % 18 10 $25 20 No 1.0 5 % 6 Hwy. Sew. $35 $45 40 38 No No -.8 5 8 % 10 % 12 12 Lib. P.&R. $11 $33 7 37 No No 2.0 -.4 2 % 7 % 2 11 F.A. G.C. G.P.B. Other $14 9 Yes (. 05) 2.5 3 % 3 $28 13 Yes (.05) 2.5 6 % 4 $10 $128 8 67 No No 1.0 +2.0 2 % 27% 2 20 Source: U.S. Department of Commerce, Government Printing Office, 1980). City Government Finances 1978-79 (Washington, D.C.: U.S. Key: Gen. Exp. = general expenses Pol.= police San. = sanitation Hwy. = highway Sew. = sewage Lib. = library P.&R. = parks and recreation F.A. = financial administration G.C. = general control G.P.B. = general public buildings _. 0 N

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compared to 8 % ), parks and recreation (11 % compared to 7%), and sewage (12 % compared to 10 % ). Liberal cities spend higher proportions for general control which includes municipal court costs. 103 This analysis presents a snapshot of things at one point in time. Budgetary trends and changes in budgetary behavior are also of interest in this study. We will investigate trends in budgeting over the past twenty years by measuring changes in the allocation or relative growth of budget variables. Com arison of Chan es in Budget Variables by Ideology 20 Years) Instead of analyzing per capita variables at one point in time, the growth of per capita budget variables is explored. Growth of per capita budget variables describes the change that has occurred in budget variables over time, and is calculated over a twenty-year period by use of the following fonnula: Per capita cost or income FY78-79 Per capita cost or income FY59-60 Per capita cost or income FY59-60 Appendix C lists per capita growth rates in liberal and conservative cities for budget variables. Table 5-3 summarizes the mean percent increases of revenues in liberal and conservative cities;! scores and difference in growth of revenue categories are also explored. Appendix G lists the per capita revenue sources in fiscal year 1978-79 and fiscal year 1959-60. Per capita totals have been adjusted for noncomparable

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Table 5-3 Growth of per Capita Revenues in Liberal and Conservative Cities, 1959 to FY1978-79 Intergovernmental Charges and MiscelGeneral Revenue laneous Revenue Taxes Revenue Debt Liberal Cities l, 135 % 546 % 280 % 453 % 100 % Conservative Cities 2,407 540 272 473 236 Significant Difference No No No No Yes (.Ol) t Score -1. 9 .04 .06 -1.8 -2. 96 Source: U.S. Department of Commerce, City Government Finances 1978-79 (Washington, D.C.: U.S. Government Printing Office, 1980); U.S. Department of Commerce, City Government Finance~ 1959-60 (Washington, D.C : Government Printing Office, 1961). --' 0

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services. Table 5-3 delineates the average per capita growth of revenues in liberal and conservative cities between fiscal years 1959 and 1978-79. It is important to remember that all revenue figures have been adjusted to account for noncomparable services. Great differences in the growth rates of revenues after these adjustments were made were not discovered. Debt was the only area where a statistically significant difference was recorded. This can be explained by two factors. In 105 many liberal cities the major portion of local debt is accrued in order to fund noncomparable social welfare services such as education and housing and urban renewal. For example, in New York City for fiscal year 1978-79, 55 percent of the city's general debt was attributed to educa tion, hospitals, and housing. This debt was subtracted in order to provide comparability with other cities. Another factor which may account for the fact that debt grew at a faster pace in conservative cities is solvency. Financially strapped cities such as New York no doubt would have liked to borrow indefinitely in order to meet their obligations. New York City's inability to sell its bonds, however, prevented it from successfully implementing this strategy. Between fiscal year 1975-76 and fiscal year 1978-79, gross debt outstanding in New York City actually declined by 26 percent. This occurred after 1975 when the city tried to improve its financial posture. In contrast to New York's situation, gross debt outstanding in a fiscally untroubled city such as Dallas grew at a rate of 7 percent during the same time period.

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106 Growth rates of expenditures were also explored. Table 5-4 describes the growth rate of per capita expenditures over a period of twenty years. Again, only expenditures commonly assumed by all cities were investigated. Statistically significant differences were not discovered in the growth rates of the majority of expenditure variables. It was discovered that, while not statistically significant, the growth rates of conservative cities outpaced the growth rates of liberal cities in most areas. Table 5-2 shows that per capita expenditures were generally higher in liberal cities than in conservative ones. The faster growth rates in conservative cities over time should reduce the gap between per capita expenditures in liberal and conservative cities, producing a convergence in rate of spending. Different growth rates were discovered in two minor categories of expenditures. Library allocations grew at a faster pace in liberal cities, while parks and recreation expenditures grew at a faster pace in conservative cities. In terms of amenity services, conservative cities appear to provide greater funding for parks and recreation than do liberal cities. Per capita expenditures and the growth of per capita expenditures over time between liberal and conservative cities have been explored. How cities decide to allocate resources and the budget strategies they utilize is another subject of interest and is explored below. Municipal Budgeting Strategies Traditionally, incrementalism has been the dominant mode of budgeting. Incrementalism has been defined as small, or marginal, changes from the status quo. These small changes are either requested by the

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-~ -------------l 07 agency seeking funds or granted by the legislature. The literature is replete with verification of incremental budgetary behavior. 9 Recently a number of writers have expressed criticism of blind incremental or decremental (in times of budget cutbacks) approaches to budgeting. Peter Natchez and Irvin Bupp stress the competitive aspects of budgeting in contrast to the incremental approach: This competition among alternative programs seems to have been all but lost in the work of Davis, Dempster, and ~lildavsky. These scholars have argued that agency budgets are produced by relatively straightforward incremental strategies and hence are not often an especially interesting source of conflict, not to mention change and innovation.10 Charles Levine claimed that "sharing the pain" of budget cuts, or "across-the-board" strategies, is not responsible management, 11 because every agency does not contribute equally to the goals, purposes, and basic functions of the government. More responsible leadership would identify priorities and allocate (target) funds based upon these priori ties. Levine further maintained that the allocation decisions usually involved tradeoffs between equity and efficiency. 12 Equity refers to an incremental strategy, efficiency to a targeting strategy. Others such as Lewis and Logalbo stated that across-the-board strategies do not constitute a reasonable management response unless present budgets reflect the community's desired mix of services. 13 Such tactics do not reward and encourage efficiency. Instead, they produce budgetary inflexibility reproducing past inefficiencies. Arthur Okun convincingly argued that the pursuit of efficiency necessarily creates inequality. Society is therefore faced with a tradeoff between efficiency and l t 14 equa, y.

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108 Some cities will give priority to equitable distributions of funds, while other cities will be more concerned with efficient alloca tions. We assume that cities placing high priority on the equity value will be characterized by growth of individual expenditures approximating the growth of all variables. Cities placing priority on the value of efficiency will be more likely to have greater disparity in their growth patterns. Cities giving priority to the value of equity are said to be implementing an across-the-board strategy. Cities prioritizing efficiency are said to implement a targeted strategy. In a targeted strategy definite winners and losers emerge in the yearly battle over funds, in contrast to the fair share distribution expressed in the across-the-board strategy Allocation variance, or variance between the growth of expenditures, describes the type of budget strategy implemented. A high variance indi cates that large differences exist between the growth rates of expenditures (definite winners and losers emerging). This reflects a targeting strategy, while a low variance reflects an across-the-board strategy. Variance is computed by subtracting the growth of similar expenditures, such as police, fire, sanitation, highways, sewage, and parks and recrrea tion, and the sum of all other expenditures, from aeneral expenditures, squaring the differences, and summing the squared differences. Table 5-5 compares variance in liberal and conservative cities. The mean variance of liberal and conservative cities is computed and compared on the basis of at test. Statistically significant differences between the variance of liberal and conservative cities were not discovered. The range of variance, however, was great, with certain cities appearing to

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Table 5-4 Growth of per Capita E x penditures in Liberal and Conservative Cities, 1959 to FY1978-79 Gen E x p. Pol. Fire San. Hwy. Sew. Lib. P.&R. F.A. G.C. G.P.B. Liberal Cities 458 % 465 % 312 % 232 % 156 % 644 % 269 % 290 % 449 % 710 % 379 % Conservative Cities 508 6 3 8 344 259 317 383 96 704 584 458 352 Significant Difference No No No No No No Yes Yes No No No ( 01 ) (. 01 ) t Score -.7 -1. 73 -.5 4 -1.4 7 4.4 3 2 -1.0 1.06 l Source: U.S. Department of Commerce, City Government Finances U.S Government Printing Office, 1980); U.S. Department of Commerce, (Washington, D.C : U.S. Government Printing Office, 1961). 1978-79 (Washington, D.C : City Government Finances 1959-60 Key: Gen. Exp. = general expenses Hwy. = highway Pol. = police Sew. = sewage San. = sanitation Lib. = library P.&R. = parks and recreation F.A. = financial administration G.C. = general control G.P.B. = general public buildings Other 1449 % 1178 No 5

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Table 5-5 Growth of per Capita Expenditures in Liberal and Conservative Cities : FY1977-78 to FY1978-79 General Parks and ExpendiSanitaRecreaAll City tures Police Fi re tion Highway Sewage tion Other Variance Liberal Cities Baltimore -8 % -1 % 2 % 9 % -56 % -56 % 2 % 1 % 5,328 San Francisco 4 18 6 20 -42 103 59 -7 15,519 Los Angeles 6 2 -6 -4 4 2 28 8 748 New York -3 -6 -1 -6 12 35 8 -4 1,814 Cleveland 8 3 -5 -1 -7 54 0 8 2.680 Memphis 7 5 6 6 20 2 9 6 205 Boston 12 0 42 -22 -7 22 8 11 2,722 Detroit 11 4 -9 -7 31 -3 31 15 1,785 Milwaukee 14 -5 8 10 47 -5 23 16 1,948 Chicago 5 5 -1 1 2 -26 37 8 2,055 Philadelphia 2 5 4 4 -29 2 -16 17 1 ,527 San Jose -1 -1 3 -1 27 -31 -15 8 1,896 Mean 3,186 Standard Deviation 4,080 __, __, 0

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City Houston San Diego San Antonio Indianapolis New Orleans Dallas Columbus Phoenix Mean Standard Deviatwon Standard Error of Difference t Score General Expenditures Police 31 % 17 % -1 15 25 9 -5 16 3 29 20 38 16 12 11 Fire 15 % 16 12 8 6 15 12 10 Table 5-5-(continued) Sanita tion Highway Conservative Cities 22 % 55 % 6 7 10 14 10 47 -41 6 38 25 5 61 7 29 Parks and RecreaSewage tion 44 % 52 % -19 8 23 19 -5 23 -22 32 -11 45 9 57 28 21 All Other 32 % -9 42 7 32 43 63 5 Variance 1,720 l ,203 1,168 2,038 5,318 2,426 4,605 705 2,398 1,682 3,515 .22 Source: U.S. Department of Commerce, City Government Finances 1977-78 (Washington, D.C.: U.S Government Printing Office, 1979); U.S. Department of Commerce, City Government Finances 1978-79 (Washington, D.C. : U.S. Government Printing Office, 1980). _, _, _,

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112 follow an across-the-board strategy and others a targeted strategy. Variance ranged from a low of 205 in Memphis to a high of 15,519 in San Francisco. Growth of Budget Variables All budget variables do not grow at identical rates. Some are per ceived to be more important and receive additional funding. Others may be seen as a spending category that can be put off until a later date. An example of the latter form of budgeting is capital investment. Many of our nation's older cities are facing problems because of capital disin vestment. U.S. News and World Report stated in 1981 that "faster than money can be found to rebuild them, the buildings and amenities that make U.S. cities livable are falling apart. 1115 City officials pressed to meet everyday expenses cut back on capital improvements and later find that they cannot afford to replace deteriorating systems. Many cities can barely afford the cost of repairs to bridges and highways. No doubt some expenditure categories are being neglected while a few categories have increased in funding. Growth of spending in indi vidual categories was computed and compared. Budgetary winners and losers are identified in this analysis. These calculations are referred to as relative growth of budget variables. Absolute growth or the growth of the variables (simple percentage increase over time) is described in Table 5-6. Large disparities existed between the growth rates of expenditures. The relative growth of both revenues and expenditures was calculated, which describes growth rates in relation to a fixed value (the growth of general revenues and the growth of general expenditures) (see Table 5-7).

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113 Table 5-6 Absolute Growth of Budget Variables in All Cities, 1959 to FY1978-79 Number of Percent Expenditures Cities Increase Other 18 l ,056 Public ~~elfare 5 904 Hea 1th 13 722 General Expenditures 20 437 Police 20 430 Education 5 428 Sewage 20 395 Hos pita 1 8 370 Financial Administration 18 369 General Public Buildings 14 359 General Control 18 339 Fire 20 325 Parks and Recreation 20 310 Library 15 306 Sanitation 20 235 Capital Outlays 20 140 Highways 30 118

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Table 5-7 Relative Growth of Budget Variables in All Cities, 1959 to FY1978-79 Revenues (Adjusted) Intergovernmental Revenues Charges and Miscellaneous Revenues Taxes Gross Debt Outstanding Expenditures "Other" Public Welfare Health Police Education Sewage Hospitals Financial Administration General Public Buildings General Control Fire Parks and Recreation Library Sanitation Capital Outlays Highways Above Average Growth +973 +65 +l,069 +467 +285 H4 Be 1 ow A verag e Growth -210 -371 -7 -9 -42 -67 -68 -78 -98 -112 -127 -131 -202 -297 -319

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115 Table 5-7 shows individual revenue and expenditure categories that grew at a faster or slower pace than the growth of general revenue and expenditures. In regard to budget revenues, intergovernmental revenue grew at the fastest pace. The growth of debt and taxes did not keep pace with the growth of all revenue categories. In regard to budget expendi tures, social welfare expenditures, such as public welfare and health, grew at a higher than average pace. Other social welfare functions such as education and hospitals grew only slightly below the average growth for all expenditures. The lowest growth was experienced in the infra structure and amenity functions. Highways, capital outlays, sanitation, librarie~ and parks and recreation experienced the lowest rates of growth. Overhead expenditures such as general control, general public buildings, and financial administration experienced growth patterns that fell roughly in the middle of all expenditure categories. It is interesting to note that expenditures for sewage grew at a faster pace than most other categories. This is consistent with George Peterson's assertion that the 1972 amendments to the Water Pollution Control Act, prescribing secondary treatment standards that localities were supposed to meet by 1977, spurred sewage expenditures. 16 It is not surprising also that, in regard to essential services, growth of police expenditures was the highest, followed by growth in fire expenditures and the growth of sanitation expenditures. Police is recognized by many as the most essential of the three, with sanitation viewed as the least crucial. Growth of intergovernmental revenue over the years has been well documented. Deil Wright stated,

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116 Intergovernmental revenues demonstrate clearly the ten-year hidden revolution in municipal finances. Actual revenues increased nearly sixfold as federal dollars rose by a multiple of ten and state monies by a multiple of five .... Intergovernmental revenue approached 40 percent of total general revenue in 1975, contrasted with 22 percent in 1967. 17 The growth of intergovernmental revenues continued unabated even under the more conservative Nixon and Ford administrations. Congress was success ful in providing large amounts of federal aid to cities. Even the more conservative cities became more and more dependent upon intergovernmental transfers. Growth of intergovernmental revenues over the past twenty years in these conservative cities was even greater than the growths experienced by liberal cities. Difficulties arise when trying to compare services not assumed by all municipalities. Education and public welfare are two such services. Municipal expenditures for these services must be compared to the expendi tures made by other jurisdictions for these functions. For example, in order to compare education expenditures between cities, munitcipal expen ditures in cities with dependent school districts must be compared to county expenditures for cities with independent school districts. Table 5-8 compares the growth of spending in cities that assume responsibility for noncompatible functions. The growth of spending in independent school districts did not differ very much from the growth of spending in dependent school districts. Table 5-8 describes the growth of absolute spending for edu cation. The growth of education spending in the two conservative cities was only slightly higher than the growth of spending in the liberal cities. This higher growth rate was not statistically significant.

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117 Table 5-8 Growth of Spending in Dependent and Independent School Districts Years City 1966-78 1966-70 1970 74 1974-78 Indeeendent Districts Chicago 337 % 83 % 50 % 59 % Cleveland 235 74 30 48 Da 11 as 285 65 46 60 Detroit 206 37 55 44 Houston 303 61 13 122 Los Angeles 176 30 45 47 Philadelphia 264 143 20 24 Mean 258 70 37 58 Standard Deviation 52 Deeendent Districts Baltimore 197 100 6 39 Boston 407 78 58 80 Memphis 124 64 37 51 Ne w York 170 66 50 6 Mean 224 77 38 44 Standard Devi a ti on 125 Standard Error 87 5 5 28 38 t Score .4 l. 2 -.03 5 Source: U.S. Department of Commerce, Statistics of Public Schools, Fall 1965 (Washington, D.C.: U.S. Government Printing Office, 1966); U S. Department of Commerce, Statistics of Public Elementary and Secon dary Day Schools, Fall 1969 (Washington, D.C.: U.S. Government Printing Office, 1970); ibid for years 1973 and 1977, with publishing dates of 1974 and 197 8 respectively; U.S. Department of Commerce, City Govern ment Finances 1965-66 (Washington, D.C .: U S. Government Printing Office, 1967); ibid., for years 1969-70, 1973-74, and 1977-7 8 with publishing dates of 197~975, a , nd 1979, respectively.

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118 Growth of per capitized education expenditures was also compared between independent and dependent school districts. Statistically significant differences were not found. Growth of per capita education expenditures were slightly lower in conservative cities. Differences between the growth of public welfare expenditures in cities where the municipality assumes responsibility and in cities where the responsibility is assumed by the countywerealso explored. Table 5-9 lists the growth of public welfare spending by county and city jurisdic tions. No statistically significant differences were found between the growth of public welfare expenditures. The average growth rate was slightly higher in cities that assumed responsibilities for the payments themselves, but this difference was not significant. Growth rates in the two conservative cities were not significantly different from the rates of growth in liberal cities. Summary This chapter has investigated the connection between political ideology and specific budget variables. Problems of overlapping juris diction and noncomparable functions have prevented a great deal of com parative budget analysis in the past. These problems will be addressed through implementation of various decision rules which correct for non comparable municipal functions. Major differences between liberal and conservative cities were found to exist in regard to per capita intergovernmental aid. Liberal cities received higher per capita totals of intergovernmental aid than conservative cities. The percentage of state intergovernment aid to total

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Table 5-9 Growth of Public Welfare Spending in Cities and Counties Years Jurisdiction 1966-78 1966-70 1970-74 County Cuyahoga (Cleveland) Franklin (Columbus) Wayne ( Detroit) Los Angeles (Los Angeles) Milwaukee (Milwaukee) San Diego (San Diego) Mean Standard Deviation City New York San Francisco Philadelphia Mean Standard Deviation Standard Error of Difference t Score 132 % 210 301 236 407 232 253 93 511 144 404 353 189 l 07 -.9 -21 % -24 0 l 08 89 72 37 59 191 l 01 29 107 81 54 -1 29 87 % 69 206 24 164 23 96 75 59 13 83 52 36 52 .84 119 1974-78 57 % 142 32 30 1 57 53 48 32 7 113 51 55 40 .05 Sources: U.S. Department of Commerce, Local Government Finances in Selected Metro olitan Areas in 1965-66 (Washington, D.C.: U.S. Government Printing Office, 1967 ; U.S. Department of Commerce, Local Government Finances in Selected Munici al Areas and La, e Cities 196970 Washington, D.C.: U.S. Government Printing Office, 1971); U.S.

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120 Table 5-9-(continued) Department of Commerce, County Government Finances in 1973-74 (Washing ton, D.C.: U.S. Government Printing Office, 1975); U.S. Department of Commerce, County Government Finances in 1977-78 (Washington, D.C.: U.S. Government Printing Office, 1979); U.S. Department of Commerce, Cit Government Finances 1965-66 (Washington, D.C.: U.S. Government Printing Office, 1966; U.S. Department of Commerce, City Government Finances 1969-70 (Washington, D.C.: U.S. Government Printing Office, 1971); U.S Department of Commerce, City Government Finances 1973-74 ( W ashington, D.C.: U.S. Government Printing Office, 1974); U.S. Depart ment of Commerce, City Government Finances 1977-78 (Washington, D.C.: U.S. Government Printing Office, 1979).

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121 municipal revenue was significantly higher in liberal cities. Some dif ferences were also discovered with respect to per capita expenditures. Liberal cities spent significantly more per capita on the categories of police, general control, and financial administration. Analysis of growth of per capita expenditures revealed some inter esting insights. Over the past twenty years grcss debt outstanding (debt) actually grew at a faster pace in conservative cities than in liberal cities; the former being in better financial condition, could borrow without difficulty. Some liberal cities such as New York and Cleveland were unable to sell their bonds and borrow. It was also found that, over the past twenty years, liberal cities were more likely to allocate funds to library expenses while conservative cities were more likely to allocate funds to parks and recreation. Growth rates in both of these categories differed statistically by political ideology. Municipal budget strategies were also investigated. The degree that a municipality adhered to an across-the-board or targeted budget strategy was estimated by computing the amount of variance in the growth of municipal expenditures. It was assumed that municipalities with a high variance pursued a targeted strategy, maximizing the value of efficiency rather than equity. Liberal cities on the average had a higher variation in expenditure growth, but this difference was not statistically significant. Finally, growth of individual revenues and growth of expenditures were compared. It was discovered that for all cities (liberal and conserva tive) the growth of social welfare expenditures such as public welfare and health outstripped the growth of all other categories of spending.

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122 Capital outlays and highway expenditures exhibited the slowest growth. This is consistent with the finding of many analysts who describe the decay of the munitipal infrastructure and the transfer of funds from capital to expense budgets. The growth of expenditures for noncomparable services such as edu cation and welfare costs was also explored. It was discovered that growth rates of these expenditures did not differ significantly by jurisdiction. Growth rates were not statistically different when coun ties assumed responsibility for payments. This chapter has described the connection between political ideology and the behavior of individual budget variables. It was dis covered that some statistically significant budgeting differences existed between liberal and conservative cities. Differences were found to exist in regard to per capital expenditures at one point in time and the growth of per capita expenditures. Differences betweeen cities of contrasting ideologies can be observed in greater detail through case studies. This strategy is employed in Chapters 6 and 7, where budgetary issues in a liberal city and a conservative city are investigated. Notes 1 Frances Fox Piven and Richard Cloward, Regulating the Poor: The Function of Public Welfare (New York: Random House, 1971), p. 47. 3 Ibid., p. 69. 4 Ed Magnuson, "The Summit That Failed," Time, May 10, 1982, p. 10. 5 New York Times, January 21, 1981, p. Bl. 6 1ra Sharkansky, The Politics of Taxing and Spending (New York: The Bobbs-Merrill Co., Inc., 1969), p. 126.

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---7 Astrid E. Merget, "The Era of Fiscal Restraint," in The 1980 Munici al Yearbook (~~ashington, D.C.: International City Management Association, 1980, p. 185. 123 8 Deil Wright, Understandin Inter overnmental Relations (North Scituate, Mass.: Duxbury Press, 1978 p. 112. 9 Richard Fenno, The Power of the Purse (Boston: Little, Brown, 1966), pp. 267, 354, 356; Ira Sharkansky, 11 Agency Requests Gubernatorial Support and Budget Success in State Legislatures," American Political Science Review, 62 (December 1968), 1223; John Crecine, Governmental Problem Solving (Chicago: Rand McNally, 1969), pp. 206-208; 0. A. Davis, M. A. H. Dempster, and A. Wildavsky, "A Theory of the Budgetary Process, 11 American Political Science Review, 60 (September 1966), 530-531. 10 Peter Natchez and Irvin Bupp, "Policy and Priority in the Budge tary Process," American Political Science Review, 67 (September 1973), 954. 11 Charles Levine, "More on Cutback Management: Hard Questi ans for Hard Times, 11 in Charles Levine, ed., Managing Fiscal Stress (Chatham, N.J.: Chatham House Publishers, 1980), p. 311. 12 charles Levine, "Organizational Decline and Cutback Management," Public Administration Review (July/August 1973), 320. 13 carol Lewis and Anthony Logalbo, "Cutback Principles and Prac tices: A Checklist for Managers, 11 Public Administration Review (March/ April 1980), 186. 14 Arthur Okin, Equity and Efficiency (\4ashington, D.C.: The Brookings Institute, 1975), p. l. 15 u.s. News and World Report, May 18, 1981, p. 82. 16 George Peterson, "Capital Spending and Capital Obsolescence: The Outlook for Cities," in Roy Bahl, ed., The Fiscal Outlook for Cities (Syracuse, N.Y.: Syracuse University Press, 1978), p. 71. 17 wright, 76.

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CHAPTER 6 CASE STUDY OF NEW YORK CITY New York City has long been associated with big spending and prof ligate liberal social programs. The fiscal crisis of 1975 reinforced this image. New York City was said to have been living beyond it means for many years, with the fiscal crisis finally grinding its finances into line with the finances of other cities. New York City was chosen for in-depth analysis because of its history of social consciousness dat ing to the early 18OOs and its association with liberal values. As a port of entry for immigrants, the city has always been aware of the social problems that exist in any large center. Social legislation,and the liberal ideology supporting this legislation,has a long history in New York. This history is reviewed below. The fiscal crisis of 1975 drew national as well as international attention. It can be argued that the crisis arose from two factors: the city 1 s attempts to do too much and the recession of 1974-76. Both of these factors led to the immediate cash-flow problems which have been categorized as the fiscal crisis. New York 1 s fiscal crisis is investi gated in this chapter. History of Social Consciousness in New York City In New York City a tradition of service to the community dates back at least to 1812. 1 New York as a port of entry for immigrants was a focal point of poverty, wretchedness, and injustice. New York 1 s 124

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125 struggle against poverty and urban blight did not begin with Lyndon Johnson's Great Society. The city's concern with social legislation was in evidence by the late nineteenth century. Jacob Riis, part of the reform movement at this time, was active in the Children's Aid Society, which conducted a continuous battle against the tenements and slums of the city. Riis drew attention to the plight of neglected and abandoned children and applauded efforts of agencies that attempted to ease the burden of the poor. The Society for the Prevention of Cruelty to Children was one such agency. 2 The Gilder Commission was another example of concern for the plight of the underprivileged. As early as 1894 the Gilder Commission began work to outlaw the old rear tenements. The results of this work was the Tenement Housing Law of 1895. By 1901 a new Tenement House Law was passed that provided for light and ventilation in all rooms. In addition, the new tenement law specified that no more than 70 percent of a lot be occupied by a structure; buildings were limited to one-half times the width of the street and no room of less than 70 square feet was permitted. Finally, stairs and hallways were to be fireproofed in buildings of five or more t 3 s or1es. Riis felt that the greed of capital had brought about the wretched conditions which he described. He believed that the upper classes could no longer choose to ignore the plight of the poor. In 1890 he wrote: Long ago it was said that one half of the world does not know how the other half lives. That was true then. It did not know be cause it did not care. The half that was on top cared little for the struggles and less for the fate of those who were underneath, so long as it was able to hold them there and keep its own seat. There came a time when the discomfort and crowding below were so great, and the consequent upheavals so violent, that it was no longer an easy thing to go, and then the upper half fell to inquir ing what was the matter.

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126 Riis attributed much of the social consciousness of New York to neces sity arising out of the potential for this violent class conflict. In the 1930s private charity first accepted the challenge of providing jobs to the unemployed of New York. Two organizations, the Association for Improving the Condition of the Poor and the Charity Organization Society, created a committee to raise funds in order to hire the unemployed. In 1931 another committee, headed by the chairman of Bankers Trust Company, also provided work for about 26,000 people. A second committee, headed by the president of Manufacturers Trust Company, hired about 32,000 people in 1931. 5 During the depression, tbe mayor of New York, Fiorello La Guardia worked closely with the Roosevelt administration. During its four months of existence in 1934, the Civil Works Administration, a federal agency, spent over $50 million in New York City. 6 The Civil Works Administra tion, or CWA, however, was liquidated by the end of March 1934. In 1935 the Roosevelt administration filled the void created by the dissolution of CWA with a new jobs program. The Emergency Relief Appropriations Bill provided the funds to hire eventually 3,000,000 Americans, 200,000 of them New Yorkers. 7 Budget Trends in New York City To many observers it might seem incongruous that a city with the fabulous wealth of New York could one day face bankruptcy. This, how even, did occur in 1975. How did this come about? Revenue and expen diture patterns since 1959 will be investigated in an effort to answer this question.

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127 New York City had a reputation for high municipal spending long before the fiscal crisis. Roy Bahl, Alan Campbell, and David Greytak compa~ed New York's per capita expenditures in 1971 with the average per capita expenditures of the ten largest cities in the nation. 8 They found that per capita expenditures in New York were consistently higher than the ten-city average. 9 (See Table 6-1.) Expenditure Category Total Expenditures Interest on Debt Retirement Policea F a 1 re Sanitation Educationb Health and Hospitalb Welfareb Variable Functions Common Functions Table 6-1 Per Capita Expenditures, 1971 New York $1,207 31 78 65 28 42 253 128 254 989 218 Ten-City Average $685 19 42 57 24 34 112 61 l 02 491 194 New York to Average Index 176 % 163 186 114 117 124 226 210 247 201 112 Source: Roy W. Bahl, Alan K. Campbell, and David Greytak, Taxes, Ex enditures, and the Economic Base: A Case Stud of New York Cit New York: Praeger Publishers, 1974 p. 168. acommon functions. bvariable functions. Table 6-1 compares New York's per capita expenditures with the weighted average of per capita expenditures in the ten cities. Variable

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128 functions of the city, such as education and health and hospitals,are more than 200 percent higher in New York. Variable functions refers to services that are not uniformly assumed by all municipalities. Common functions, however, were also higher in New York by a margin of between 114 and 1124 percent (these figures are found in column three of Table 6-l.) The situation that New York found itself in developed over a period of time. The situation did not arise overnight. Between fiscal years 1963-64 and 1973-74, expenditures more than tripled, with state and federal aid accounting for a great deal of the increase. 10 This depen dence on state and federal aid, however, was not cost free. Municipal expenditures had to grow in order to qualify for matching federal funds. Growth of programs often outstripped the growth of federal aid for the programs. The city grew more and more dependent upon outside sources of revenue. When these federal and state grant programs grew at a more modest pace than was expected, great pressure was exerted on the city's finances. Figures 6-l through 6-5 describe revenue trends (intergovernmental revenue, total taxes, property taxes, and charges and miscellaneous revenue) over a twenty-year period. Intergovernmental revenue and charges and miscellaneous revenue are independent sources of revenue. Total taxes includes property taxes; general sales taxes; selected taxes on items such as alcohol, motor fuel, tobacco, and public utilities; income taxes; and taxes on motor vehicle licenses. A number of interest ing trends are observed in the analysis of New York City's revenue sources. In the early sixties, intergovernmental revenue was a rela tively insignificant source of municipal revenue, but, by the early

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7.5 1 6 5 4 3 2 .s NEW YORK CITY: REVENUE SOURCES lntergoverninent Revenue ~ Total Taxes lntergovernmen+ Revenue Total Taxes __ Property Taxes ____ Charges f. Miscellcme.ous Rev,mue =--_.,,.,,.5lowing in rote ot grmvtn --/ Property / Taxes ~..,....... -----Charges and Miscellaneous Revenue~ 59 13-74 Figure 6-1. New York City: Revenue Sources ,,,,----. / ~ ---------__. N \.0

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in Billions 7 6 5 4 3 2 .5 59 NEW YORK CITY: TOTAL TAXES 6364 68-69 Figure 6-2. New York City: Total Taxes 73 () Ill 1/'1 76 __, w 0

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in Billions 7 6 5 4 3 2 .5 59 NEW YORK CITY: INTERGOVERNMENTAL REVENUE 6364 68.69 73-4 4 5 6 7 78 Figure 6-3. New York City: Intergovernmental Revenue __, w __,

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in Billions 3.5 3 2.5 2 1.5 I 9 59 NEW YORK CITY: PROPER,Y TAXES 63-64 Figure 6-4. New York City: Property Taxes n ::::!. 1(1 IJl 73-4 4 5 6 7 78-q __, w N

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17 16 15 14 13 12 11 10 q 8 1 6 5 4 3 59 in Hundred Thousands NEW YORK CITY: CHARGES ANO MISCELLANEOUS REVENUE 63-64 73-7-4 ("\ :!. "' 1/1 Figure 6-5. New York City: Charges and Miscellaneous Revenue 78-79 __. w w

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134 seventies, these funds had grown to the point where they were the dominant source of revenue for the city. Immediately before the fiscal crisis of New York in 1975, intergovernmental transfers experienced a slowing in their rate of growth as governmental funds were spread over many cities rather than targeted to specific large urban centers. Other categories of revenues continued to grow steadily until after the cash-flow prob lems of 1975. Actual declines in intergovernmental revenue, total taxes, and property taxes were recorded in fiscal year 1978-79 . A possible ex planation of this decline in revenue following the fiscal crisis may be attributed to a shift in ideology in the city. As the Laffer Curve ex plains, taxing limits are mainly subjective. Conservative philosophy, however, advocates lower tax rates in order to stimulate production while liberal philosophies advocate higher tax levels which are thought to stimulate demand through government spending. There is evidence that, following the crisis of 1975, New York initiated conservative policies of tax abatement and incentives. The implementation of this strategy was confirmed both by the data and a personal interview with the city's deputy comptroller, Paul O'Brien. These declines in revenue also occurred when figures were per capitized. Marginal declines in the population of New York City some what increased the amount of per capita revenue,but the increase was not sufficient to negate the declines in revenue in the late seventies. Expenditure trends of New York City are also a matter of great inter est. These trends for the major categories of spending (social welfare, urban services, infrastructure, overhead, and amenities) are shown in Figures 6-6 through 6-12.

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7 in Billions NEW YORK CITY! 6 EXPENDITURES 4 Sociol welfare -Urban services Infrastructure -Overhead 3 -,__ Amenities 2 Urban &et'vicQS t. .. --. ,.. ... ____ .,,,,,,-----..... ------' Overheod -... -----:-.--.--L............. . J, :::::=-.~-=~ -=------c::::-...=..=--=----() 1/1 1/1 Infrastructure . --!---. .,,,,. -..... Amenities :::: ;::~ 63-64 68-69 73 4 4 s 6 7 18-9 Figure 6-6. New York City: Expenditures __, w u,

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IS 1-4 13 12 II 10 9 8 1 6 S" 4 3 2 in Billions NEW YORK CITY: TOTAL EXPENDITURES 59 63E,4 68E,q Figure 6-7. New York City: Total Expenditures () :J UI 13-4 4 5 6 1 1s-q

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8 7 6 5 4 3 2 in Billions 59 NEW YORK CITY: SOCIAL WELFARE EXPENDITURES PUBLIC WELFARE,EDUCATION HEALTH t HOSPITAL 63-64 68-69 () :I. 1/1 "' 73-4 4 ; 6 1 78-9 Figure 6-8. New York City: Social Welfare Expenditures, Public Welfare, Education, Health,and Hospital --' w '-J

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in Billions 1.4 1.3 1 1 I.I .9 8 1 .b .5 4 .3 NEW YORK CITY: URBAN SERVICE E.XPENDITUR.ES (POLICE,FIRE,SANITATION) () ::! ~ 1}1 73-4 4 5 6 7 18-9 Figure 6-9. New York City: Urban Service Expenditures (Police, Fire, Sanitation) --' w co

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in Billions 150 2."10 230 120 210 100 /QO 180 170 160 IS-0 140 130 120 110 100 qo 80 70 60 so 59 NEW YORK CITY~ AMENITY EXPENDITURES (LIBRARY, PARKS AND RECREATION) 63-64 () :::!. \II \II 73-4 4 5 El 7 70 Figure 6-10. New York City: Amenity Expenditures (Library, Parks and Recreation) __, w \D

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1.2 I.I 1.0 .9 8 7 6 .5 :4 .3 in Billions 59 NEW YORK CITY: INFRASTRUCTURE EXPENDITURE.S ( HIGHWAY, SEWAGE, HOUSING) 63-64 () :J Ill iii 73-4 4 5 6 7 78-9 Figure 6-11. New York City: Infrastructure Expenditures (Highway, Sewage, Housing)

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.35 .3 .2s .2 1.50 -1 59 NEW YORK CITY~ OVERHEAD EXPENDITURES (FINANCIAL ADMINISTRATION GENERAL PUBLIC BUILDINGS GENERAL CONTROL) 63-64 E,5-6q n :!. "' (JI 73-1-4 5 6 7 78-9 Figure 6-12. New York City: Overhead Expenditures (Financial Administration, General Public Buildings, General Control)

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Expenditure trends in New York City describe the city's budget response to its cash-flow problems of 1975. (Changes in expenditures from fiscal years 1975-76 to 1976-77 are presented in Table 6-2.) 142 All expenditure categories with the exception of urban services declined immediately following the fiscal crisis. Total expenditures continued to decline in the late seventies but the funds lost in many categories had been restored. (Changes in expenditures from fiscal year 1975-76 to fiscal year 1978-79 are presented in Table 6-3.) Spending in the categories of education, hospital, fire, sanitation, library, highway, and housing grew after initial cutbacks in 1975-76. In other spending categories continuous decreases were noted. These categories included public welfare, health, and sewage. By far the most signifi cant of these categories, because of its size, was public welfare. Expenditures in public welfare declined by more than 642 million dollars between fiscal years 1975-76 and 1978-79. This decline represented 87 percent of the decline in total expenditures for the entire city be tween fiscal years 1975-76 and 1978-79. The data indicate that New York dramatically reduced its public welfare responsibilities into the late seventies. This fact supports two major contentions of this dissertation: 1. Ideology plays an important role in determining resource allocation decisions. 2. Budgetary theories that focus upon stability (incremental ism) do not adequately explain the dynamics of the bud getary struggle.

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Table 6-2 Changes in Expenditures in New York City from FY1975-76 to FY1976-77 Expenditures Social Welfare Urban Serivces Infrastructure Amenity Overhead % % % % % Education -3 Police +3 Highway -5 Library -8 General Control -5 Public Fire -1 Sewage -25 Parks and Welfare +.004 RecreaFinance and SaniHousing -.002 tion -18 AdministraHos pita 1 -9 tation -1 tion +15 Health -25 Public Buildings -2 Totals -3 +l -8 -14 -.002 Source: U.S. Department of Commerce, City Government Finances 1975-76 (Washington, D.C.: U.S. Total % -4 Government Printing Office, 1977); U S. Department of Commerce, City Government Finances 1976-77 (Washington, D.C.: U.S. Government Printing Office, 1978).

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Social Welfare % Education +.006 Public Welfare -18 Hospital +4 Health -33 Totals -9 Table 6-3 Changes in Expenditures in New York City from FY1975-76 to FY1978-79 Expenditures Urban Services Infrastructure Amenity Ovehead % % % % Police -1 Highway +30 Library +10 General Control Fire +6 Sewage -22 Parks and RecreaFinance and SaniHousing +30 tion -3 Administratation +6 tion Public Buildings +2 +. 17 +l -22 +37 -1 -8 Total % -5 Source: U.S. Department of Commerce, City Government Finances 1975-76 (Washington, D.C.: U.S. Government Printing Office, 1977); U.S. Department of Commerce, City Government Finances, 1976-77 (Washington, D.C.: U.S. Government Printing Office, 1978).

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145 It is interesting to note that the budget crisis of 1975 did not occur as a result of declines in the amount of revenue received from the city's major revenue sources. Ironically, since 1975-a period of time when the city was achieving solvency-revenues have actually de clined. The data support the contention that after the budget crisis the city actually reduced taxes in order to attract business investment. Solvency was achieved through reductions in expenditures rather than through increases in revenue These reductions in expenditures were not offset by corresponding increases in productivity and therefore the quality of services delivered to residents declined. Shifts in the relative importance of revenues and expenditures occurred as a result of the different rates of growth experienced by these budget categories. The relative importance of the revenue cate gories is described in Table 6-4. Table 6-4 Percent Change in Weight of Revenue Sources, 1959-79 Intergovernmental Tax Charges and MiscelYear Revenues Revenues laneous Revenues 1959 23 % 64 % 13 % 1979 45 43 12 Change +22 -21 1 Source: U S. Department of Commerce, City Government Finances 1959 ~ 60 (Washington, D.C.: U.S. Government Printing Office, 1961); U.S. Depart ment of Commerce, City Government Finances 1978-79 (Washington, D.C.: U.S. Government Printing Office, 1980)

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-146 Intergovernmental revenue increased in importance as a source of revenue in New York City between 1959 and 1979. Changes and miscel laneous revenues composed 10 percent of the city 1 s total revenue in 1959 and 1979-a constant proportion. The other two revenue categories decreased in importance as a share of the city 1 s total revenue col lected. Intergovernmental revenues, total tax revenues, and charges and miscellaneous revenues are the three major sources of local reve nues. Property tax revenue is a part of total taxes but is individu ally explored because of its traditional importance to local govern ments. The relative importance of the expenditure categories is pre sented in Table 6-5. Year 1959 1979 Change Table 6-5 Change in v/eight of Expenditure Categories: New York City, 1959.-79 Social Welfare 55 % 70 +15 Urban Services 17 % 13 -4 Infra Structure 20 % 11 -9 Governmental AdminisAmenity tration 3 % 5 % 3 3 0 -2 Source: U.S. Department of Commerce, City Government Finances 195960 (Washington, D.C.: U.S. Government Printing Office, 1961); U.S. Department of Commerce, Cit{ Government Finances 1978-79 (Washington, D.C.: U.S. Government Prrn mg Office, 1980). Between 1959 and 1979 the percentage of expenditures allocated to social welfare spending increased by the largest total. All other ex penditure categories decreased in terms of their proportional share of the budget. The growth of individual expenditure categories can also

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147 be compared with the average growth of all municipal expenditures. An index of the relative success of agencies as they attempted to secure funds is presented in Table 6-6. This index reflects the growth of a particular category's spending in relation to the average growth of all spending. Positive scores reflect growth of spending that is above average. Negative scores reflect the opposite. Table 6-6 Relative Success of Individual Governmental Agencies ; New York City 1959-79 Expenditure Category Public Welfare Health Corrections Hospitals Education General Public Buildings Sewage Police Libraries Fire Financial Administration Parks and Recreation Sanitation General Control Highways Score on Index of Relative Success +4.99 +1.30 .37 66 71 -1. 16 -1.39 -1.44 -1.47 -1.67 -1. 93 -2.56 -2. 58 -3. 08 -4. 10

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148 Public welfare recorded the largest net gain on the index of relative success, a gain of 499 percent over the increase in general expendi tures. The growth of highways was 410 percent less than the growth of general expenditures over the twenty-year period in question. It should be noted that except for two categories (health and public welfare) all expenditure categories grew at a slower than average rate. High public welfare expenditures pushed up the growth of general expendi tures and may have contributed to the fiscal crisis which is reviewed below. Causes of Fiscal Crisis There is a wide diversity of opinion concerning the causes of New York's fiscal crisis. Ideology seems to play a role in determin ing who the perceived villians were. A number of sources describing th d d d th . 1 bl ll e ay-toay events surroun 1ng e cr1s1s are ava, a e. This section does not supply a narrative account of the crisis but instead concentrates upon some of the long-term causes of the crisis. These causes can be categorized into four distinct categories. 12 Four theo ries explaining the cause of the fiscal crisis are summarized as follows: 1. Powerful unions-the theory that municipal unions forced de structive wage settlements upon the city which brought about the crisis. 2. Powerful banks-the theory that the banks were to blame for the crisis. They withheld their support for city securities in order to transform the structure of city government.

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149 3. Management crisis-a theory focusing upon the lack of effective ness in the city's managerial functions, including corruption, inefficiency, waste, and low productivity. 4. Welfare state-a theory suggesting that the fiscal crisis was caused by the expansion of expenditures for clients of the welfare state. The fiscal crisis was said to result either from the city's humane responses to the needs of the poor, as Newfield and Dubrul suggest, or from the city's being forced to respond to the poor because of their mobilization, as Piven and Cloward maintain. Most studies of New York City's fiscal crisis have included one or more of these factors as a cause of the city's fiscal problems. Conservative studies tend to emphasize all of the theories except the powerful bank theory. Problems of the welfare state and problems with powerful unions draw special concern. Liberal studies emphasize the powerful bank perspective, and many are as critical of management in efficiency as are conservative critiques. A study conducted by the conservative American Enterprise Insti tute (AEI) was typical of the conservative perspective. The AEI study claimed that the real basis of the fiscal crisis stemmed from the fact that the city was living beyond its means. Expenditures increased more than tax revenues, particularly social welfare and labor expenditures. The costs of pensions and fringe benefits were reported as other fac tors driving up labor costs and leading the city to bankruptcy. 13 The conservative perspective often stresses high wages paid to municipal employees. William Simon, Secretary of the Treasury under

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150 the Ford administration, stated that New York lacked a sense of balance. According to Simon, from 1963 to 1973, per capita municipal expenditures increased at a much faster pace than the rate of increase in other large cities. Salaries were higher for municipal government jobs than for com parable jobs in the private sector. Simon offered the following evi dence of salary i m balance in the city : l) A subway changemaker, who was not required to change anything larger than a $ 10 bill earned $212 per week compared to $150 per week for a teller at a commercial bank 2) City bus drivers often worked an 8-hour day but were paid for a 14-hour day 3) Teachers in the secondary school system earned up to $23,750, and their workloads had declined. 14 Simon expressed skepticism of the cry that New York went broke because of its welfare burden or 11 decency to the poor, 11 pointing out that the most important problem of the city was not its generosity to the poor but its attempts to subsidize large portions of the middle class: The liberal cry that New York is being drained by its decency to the poor is not just a misstatement; it is virtually a psychotic and, I submit, a racist-delusion. It is blatantly obvious that the subsidy to New York's middle class-above all, the salaries, pensions and fr i nge benefits paid to the government workers-is responsible for New York's fiscal collapse. 15 First National City Bank of New York agreed with Simon's conten tion that many of New Yor k 's public sector jobs paid better than similar jobs in the private sector. This situation was viewed as disturbing since, according to the bank, Americans used to pride themselves on the fact that in our productive society the best jobs were not in govern ment. This situation was described by the bank as occurring in develop ing countries where everyone scrambled to get on the government payroll, b t t h . f t 1 t t 16 u no as c aracter1st1c o our cap, a 1s soc,e y.

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These conservative critiques have almost exclusively emphasized the powerful union theory. Other studies were more comprehensive and balanced, discussing a wide array of factors. Ken Auletta listed ten factors which he claimed contributed to the decline of the city: 151 1) A redistribution of expenditures from police, fire, sanita tion, and education (decline from 46 % to 30 % between 1961 and 1976) to welfare, hospitals, and higher education (increase from 22% to 37 % between 1961 and 1976) 2) Growth of taxes and borrowing 3) Attraction of the suburbs 4) Rent control which slowed construction and invited abandonment of apartments 5) Growth of the power of municipal unions 6) Growth of pensions 7) Use of "moral obligation" bonds 8) Budget trickery such as hiding of expense items in the capital budget 9) Redlining of once viable neighborhoods 17 10) Redirection of federal aid by the Nixon administration. All of these factors led to the deterioration of New York's economic base. Auletta claimed that, beginning with John Lindsay, the city government ignored the hemorrhaging of its economy. While the nation's economy rebounded from the 1969 recession, the city's economy remained dormant. For the first time in its history, New York's economic pat terns did not mirror that of the rest of the nation. New York was in its own slump independent of the national economy Between 1970 and 1980 the population declined 10.9 percent, total employment dropped 7.4 percent, and personal income grew more slowly than the national, state, or SMSA average. 18 David Greytak, Donald Phare, and Elaine Morley also presented a comprehensive review of the causes of New York's fiscal crisis. Fac tors described by these authors include the following: 1. Provision of public services-The expansion of municipal services is said to have contributed to the cash-flow

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152 problems of the city. New York assumed a large number of services not provided by other municipalities Some of these were provided in order to lure matching funds from the federal government, but the costs of the programs expanded faster than the sources of funds, leaving the city "holding the bag. 2. Union pensions-New York City was a prime example of "Baumol 1 s disease" or the problem of sustained low productivity. 19 Low worker productivity interacting with inept municipal manage ment is said to characterize the city The author claimed that it took months, even years, to effectuate a reasonably simple productivity enhancement because of union resistance. 3. Tax base erosion-The tax base deteriorated as middleand uppe r -income families left the city and lower-income residents remained. Businesses, people, and jobs left the city because of high taxes and the better quality of life in the suburbs. 4. Fiscal gimmicks-The long-run harm of financial chicanery to achieve a balanced budget more than offset the short-term gains. Dubious financial maneuvers undermined confidence in the city's ability to manage its own affairs. 20 The critique from the left of the political center differs sig nificantly from the conservative critique. Banks and bankers are more likely to be the scapegoat, replacing the powerful unions. Jack Newfield and Paul Dubrul argued that banks led to the city's downfall by extorting maximum interest from a city already in economic trouble and then refusing to grant any more loans. Newfield and Dubrul contended

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153 that the recession of 1974-75 reduced municipal revenues while at the same time it forced the city to increase expenditures on social programs. Facing this need, the city was forced to go to the credit markets for revenue. The real crisis occurred when the credit market, led by the large banks, was unable or unwilling to absorb the growing demands placed upon it by the city. 21 Other left-of-center authors visualized New York 1 s problems in Marxist terms. William Tabb disputed the conservative view that wel fare chiselers and unions were shaking down the city. In Tabb 1 s analy sis the real causes of New York 1 s crisis were rooted in class conflict: 11 The perspective offered in the current analysis suggests that in fact class conflict lies at the heart of why the city crisis exists, why those in power choose the scapegoats they do and seek to impose the solutions they do. 1122 Tabb stated that the result of the fiscal crisis would be further decay ending only when planned shrinkage beat back the poor and municipal unions. Roger Alcaly and Helen Bodian agreed with Tabb 1 s contention that the fiscal crisis of New York and the rest of urban America can only be understood as part of the class struggle and the crisis of American capitalism. This crisis of capitalism is said to be rooted in declin ing profitability and a system of production for profit rather than in production for use. As a result of this orientation, anything which endangers profits will eventually lead to cutbacks in production and to rising unemployment. Rising unemployment will in turn tame labor and pave the way for future capital accumulation. Alcaly and Bodian vie~ed New York 1 s fiscal crisis as the result of these structural conditions within capitalist society.

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-------~---------------154 According to Marx, there are several factors which operate to depress profits. These factors lead to a crisis arising from the ex haustion of the reserve army of the unemployed, a crisis arising from underconsumption,or a crisis arising from the tendency of the rate of profits to fall. 23 Whichever of these crises occurs to depress profits, it sets off a process of declining production and, ultimately, reces sion. Marx further believed that recession was necessary in order to establish the basis of profitable expansion in the future: Permanent crises do not exist .... These contradictions (of capitalism) lead to explosions, cataclysms, crises in which by momentaneous suspension of labor and annihilation of a great portion of capital the latter is violently reduced to the point where it can go on.24 Alcaly and Bodian noted that New York's fiscal crisis was directly related to the recession of the midseventies which was a result of the contradictions of the capitalist economy. New York's heavy reliance on sales and income taxes made the city particularly vulnerable to down turns in the economy. Cities that rely to a greater extent upon prop erty taxes are less sensitive to the business cycle. Mathew Edel also linked New York's fiscal crisis to the systemic contradictions of capitalism. A strike of capital was viewed as the event precipitating New York's crisis. 25 Edel defined a strike of capital as any decline in investment. The cutting off of municipal bond purchases by major banks is an example of a strike of capital against the city. Edel's assessment of the role of the banks is simi lar to the assessment of Newfield and Dubrul in regard to the role of the banks in New York's crisis. Edel emphasized broad structural prob lems when discussing the plight of New York. Suburbanization is

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155 credited with weakening the fiscal base of the central city. Costs of social control through the welfare system, law enforcementfand educa tion increased greatly. Each of these factors was said to have con tributed to New York's crisis. Eric Lichten claimed that each of the four theories (powerful unions, powerful banks, management crisis, and welfare state) contri buted to the fiscal crisis of the city. Lichten maintained that each of the perspectives must be viewed within a broad Marxist framework. He saw class struggle as explaining the crisis, and each of the four per spectives mentioned as relating to this class struggle. 26 The implications of the fiscal crisis in New York were profound. The city was forced to change policies. The actual management of the city actually changed hands when the Emergency Finance Management Con trol Board (EFMCB) was granted emergency powers. The city was forced into economizing measures that would have been politically impossible in the absence of a major crisis. Opinions concerning the results of the crisis are mixed and heavily influenced by ideology. Implications of Crisis Attitudes pertaining to the long-term effects of the fiscal crisis also vary according to ideology. Those on the left are more inclined to view the crisis as disastrous ; in terms of delivery of services and in terms of the ability of workers to receive a decent rate of pay. Those on the right are more inclined to view the results of the fiscal crisis more favorably. The crisis ensured payment on municipal obligations, forced the city to adopt more rigorous managerial practices, and disciplined the labor unions. Charles Morris listed the

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following results which he viewed as accomplishments resulting from the crisis: 156 l) Overall municipal employment has been reduced by more than 20 % Wage increases have been held below the level of price in flation. This may eventually restore parity between private and public sector pay levels. 2) The $4.5 billion short-term debt that was on the city's books at the end of the 1974-75 fiscal year has been discharged or re financed. An $800 million dollar loan from the state originally advanced in 1975 was paid off in 1979. 3) In 1979 the city was able to enter the financing market on its own for the first time since 1975. 4) The city's budget and accounting systems have been synchronized for the first time ever. 5) Pension plans for new employees have been standardized aod modified to bring them more in line with accepted practicesf 7 Perceived municipal benefits from the fiscal crisis were also noted from personal interviews that were conducted in New York during the summer of 1981. Frank Rizzo, head of the municipal bond section of Standard and Poors, claimed that,as a result of the crisis of 1975, the city's fiscal management policies were upgraded. Computers were in stalled and information that was either inaccurate or unavailable prior to 1975 became reliable. Paul O'Brien, deputy comptroller of New York, claimed that the fiscal crisis forced the city to pursue more aggres sively the attraction of business to New York. Tax abatement plans were very successful in Manhattan in terms of stimulating construction and bringing about a boom of real estate values. The old Commodore Hotel is an example of a successful enterprise spurred on by the city's tax policy. In return for generous tax abatement plans, a developer tore down the decaying hotel, built a new luxury hotel, and sold it to Hyatt. The Grand Hyatt now stands in the place of the old Commodore Hotel. Instead of an eyesore where winos and junkies congregated, a vibrant, new structure stands. The new hotel attracts tourists and suburbanites who come to the city and spend their money on the city's attractions.

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157 Others do not hold a negative view of the long-term effects of the fiscal crisis. The Citizens Budget Commission (CBC), a citizens' watch dog agency, declared that in traditional monetary terms the city has brought the fiscal crisis under control. This, however, is not meant to mean that the city is in fine shape. The CBC claimed that the closing of budget gaps does not imply that the city's financial troubles are over. The CBC claims that the fiscal crisis has become a service crisis which, if not addressed, promises a deterioration in public services which could result in more threatening consequences than the bankruptcy posed in 1975. 28 Manuel Castells described the crisis simply as a means of restor ing the exploitation of workers after a period of time when they were making gains. Disciplining New York City was viewed by conservatives as a necessity in the battle of capital against labor. Massive lay offs, reductions in services, wage freezes, less hiring, accelerated workloads, and repression of militants were all utilized by the city as a means of restoring the exploitation of labor. 29 As previously stated, Eric Lichten also viewed the fiscal crisis in New York City in terms of class struggle. He postulated that capital benefited disproportionately from the crisis: Yet New York's working class and poor were forced to sacrifice disproportionately, its capitalist class actually benefited from austerity. There was a redirection of tax benefits and city and state funds to improve business conditions and lower the costs of doing business in New York, as well as generously 30 high interest rates from Municipal Assistance Corporation bonds. Lichten viewed the scarcity in New York as the result of deliberate decisions by investors to withhold funds until government priorities had been redirected. The crisis therefore represented the assertion of capital over the human needs of the working class and the poor.

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l~ Summary In conclusion, this chapter has demonstrated how political ideology can shape attitudes toward a particular event in urban poli tics, namely, the fiscal crisis of New York City. Both the causes of the event and the long-term consequences of the crisis were influenced by the ideological perceptions of the analysts. Conservatives were more inclined to believe that the crisis was caused by powerful unions, by problems of mismanagement, or by problems with the welfare state. Writers left of center were more inclined to blame the crisis on the banks or capital's needs to discipline labor. Conservatives were more likely to view the consequences of the crisis favorably. Default was avoided, sound financial practices were instituted, and expenditures were decreased. Those on the left were inclined to view the consequences of the crisis with disfavor. People were made to suffer, the quality of municipal services declined, and labor was forced to make many conces sions to management in order to protect its members' jobs. Economic determinists attributed the decline in the growth of the public agencies in New York to a downturn in the economy. The city, unable to borrow and unwilling to raise taxes because of fear of a further deterioration of its economic base, was forced to reduce expen ditures. There is evidence, however, that the reduction in the scope of government experienced by New York City was a result of a change in political philosophy. Charles Morris described some of the changes in outlook that took place between the first and second administrations of John Lindsay (1965-73):

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159 Lindsay began his second administration in a mood of humility and conciliation. His inaugural address reflected the new tone. The fl ash and swagger of his first i naugura 1 \'Jas replaced by an im plied apology for the excesses of his first term and an attitude of worried concern for the ordinary citizens .... The first round of new appointments reinforced the sense of limited objec tives. There was no search for national experts on the urban crisis, no nationwide dragnet for urbanologists .... The em phasis was to be on running the city better, not breaking new programmatic ground.31 Lindsay concentrated upon productivity and management in his second administration, lowering his confrontational posture and trying to build a bridge to the disaffected white working class. He attempted to get a grip on runaway welfare spending, restore the integrity of the police department (expose corruption), reduce crime, and increase the produc tivity of all municipal agencies. Lindsay's budget director, Edward Hamilton, initiated a management improvement program that became a model for governments anxious to improve the productivity of their agencies. Lindsay tried but could not extricate himself from his earlier association with emotional liberal causes. By 1972 he was soundly de feated in his brief bid for the presidential nomination and became, according to Morris, an object of ridicule in the city, a certain lame duck. 32 Lindsay's commitment to issues such as community control (a euphemism for black control of schools in black neighborhoods) and the housing of low-income families in middle-income neighborhoods was not forgotten. Early positions on these issues cost him support in middle class areas. Racial confrontation arose in Forest Hills, Queens, over the housing issue, while the issue of community control shut down New York City's school system when the teachers' union struck. Morris claimed that white parents were enraged that their children were being denied an education by "the irresponsible actions of a handful of blacks. 1133

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The issue of community control which was fervently supported by Lindsay polarized the city. Proponents of decentralization, or com munity control, eventually were defeated in New York City,with this defeat providing insight into why the ideology of liberalism has be come less salient in recent years: 160 In the final analysis the strikes were not [so much] about race as they were about perceptions of race. The view of race that Lindsay had made the keynote of his administration was put to an empirical test and was forced to relate only distantly to re ality. That view, oversimplified and somewhat caricatured, held that blacks were an oppressed people in New York City; that they could assume a rightful place in American society only when they had gained power and control over their destinies; that the transition to black independence would be traumatic and pos sibly revolutionary; that the key task of a public official was to facilitate the transition as nonviolently as possible in the interest of white and black society alike; and that in the pro cess inexplicable, outrageous or even criminal behavior by blacks could be ignored for the sake of the larger goals .... It [this view] was fatally flawed. By allowing radicals to speak for the mass of blacks it ignored the rapid assimilation of blacks that was taking place in the city and disenfranchised the respected black community. It overweighted the problems of minority progress against the majority's right to aspirations of its own. It pro posed a double standard of appraisal and performance which can never be the basis of an equitable society. Worst of all, it was dangerously polarizing the mindset of Lindsay's city planning staff, who blamed the problems of the city's blacks on the callous disinterest of the white middle class, betrayed a kind of simplis tic self-righteousness that was inadequate as a premise for government.34 The polarization and overweighting of the problems of minority progress alluded to by Morris seem to have led to an ideological backlash in the city and possibly even in the nation. The crusading Lindsay first paired down his objectives and then, after his second term, stepped down, never running for public office again. Abe Beame, the comptrol ler who promised to put the city on a sound financial footing, replaced Lindsay in 1973.

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161 The budgetary data indicating reductions in general expenditures as well as a personal interview with the deputy comptroller, Paul O'Brien, indicate that New York City in the late seventies followed conservative strategies. The tax incentive program implemented in Manhattan and the reduction in public welfare spending are two concrete examples of this conservative philosophy. The movement in New York away from liberal to conservative posi tions is evidence of a convergence theory existing between liberal and conservative cities. This convergence theory postulates that policy differences between liberal and conservative cities are shrinking. The data indicate that the expansiveness of the public sector in liberal cities is abating; yet growth of municipal expenditures continues at a brisk pace in conservative cities. The importance of ideology in deter mining questions such as the scope of government is witnessed today at the national level in the desire for limited government as exemplified in the Reagan administration Notes 1 First National City Bank, Profile of a City (New York : McGraw Hill Book Co., 1972), p. vii. 2 Jacob Riis, The Children of the Poor (New York: Garrett Press, Inc., 1979), p. vii. 3 Ib 'd ... _l_., p. Vll l. 4 Jacob Riis, How the Other Half Lives (New York: Charles Scribner's Sons, 1890), p. l. 5 Barbara Blumberg, The New Deal and the Unemployed (Cranbury, N.J.: Associated University Press, 1979), p. 20 6 1bid., p. 32. 7 Ibid., p. 41.

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162 8 Chicago, Los Angeles, Philadelphia, Detroit, Houston, Baltimore, Dallas, Wasihington, Cleveland, and New York. 9 Roy W. Bahl, Alan K. Campbell, and David Greytak, Taxes, Expen ditures, and the Economic Base: A Case Study of New York City (New York: Praeger Publishers, 1974), pp. 163-174. 10 David Greytak, Donald Phares, and Elaine Morley, Municipal Out ut and Performance in New York Cit (Lexington, Mass.: D. C. Heath and Co., 1976, p. 25. 11 An excellent description of the cr1s1s is found in Ken Auletta, The Streets were Paved with Gold (New York: Random House, 1980); Charles Morris, The Cost of Good Intentions (New York: McGraw-Hill Book Co., 1980); Fred Ferretti, The Year the Big Apple Went Bust (New York: G. P. Putnam's Sons, 1976); and Jack Newfield and Paul Dubrul, The Abuse of Power (New York: The Viking Press, 1977). 12 Eric Lichten, "The Fiscal Crisis of New York City and the Develop ment of the Austerity," Insurgent Sociologist, 9:2 (Fall 1979-Winter 1980), 77. 13 Damodar Gujarati, Pensions and New York City's Fiscal Crisis (Washington, D.C.: American Enterprise Institute for Public Policy Research, 1978), p. 5. 14 william Simon, A Time for Truth (New York: Berkley Books, 1978), p. 147. 15 Ibid., p. 152. 16 First National City Bank, Profile of a City (New York: McGraw Hill Book Company, 1972), p. 4. 17 Ken Auletta, p. 35. 18 Ibid., 91 p. 1 \Jilliam Baumol, "Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis," American Economic Review, 57 (June 1967), 415-426. 20 Greytak, Phares, and Morley, pp. 113-119. 21 Jack Newfield and Paul Dubrul, The Abuse of Power (New York: The Viking Press, 1977), p. 17. 22 william Tabb, "Blaming the Victim," in Roger E. Alcaly and David Mermelstein, eds., The Fiscal Crisis of American Cities (New York: Vintage Books, 1977), p. 326. 23 Roger Alcaly and Helen Bodian, "New York's Fiscal Crisis and the Economy," in Roger Alcaly and David Mermelstein, eds., The Fiscal Crisis of American Cities (New York: Vintage Books, 1977), p. 44. 24 Karl Marx, Theories of Surplus Value (Moscow: Progress Publishers, 1968), p. 497.

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163 25 Mathew Edel, 11 The New York Crisis as Economic History, 11 in Roger Alcaly and David Mermelstein, eds., The Fiscal Crisis of American Cities (New York: Vintage Books, 1977), p. 229. 26 Lichten, p. 78. 27 charles Morris, The Cost of Good Intentions: New York City and the Liberal Experiment, 1960-1975 (New York: McGraw-Hill Book Co., 1980), pp. 236-237. 28 citizens Budget Commission, New York City's Fiscal Crisis: A Redefinition, November 1980, Vol. 47, Number 9, p. 6. 29 Manuel Castells, The Economic Crisis and American Societ (Princeton, N.J.: Princeton University Press, 1978 p. 236. 30 Lichten, p. 71. 31M orris, pp. 148-149. 32 Ibid., p. 159. 33 Ibid., p. 113. 34 Ibid., p. 116.

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CHAPTER 7 CASE STUDY OF DALLAS Introduction Just as New York City is associated with liberal political thinking, Dallas is synonymous with conservativism. This, however, was not always the case. Although Dallas was founded by John Neely Bryan in 1841, it is said that much of its spirit is from La Reunion, a French socialist com munity established in 1855. 1 This community consisted of a group of French, Swiss, and Belgian utopian socialists who sought to create an earthly heaven on the Texas prairie. For a number of reasons the social ist experiment failed and Dallas evolved into a city associated with a political philosophy quite different from the inclinations of the early socialist cornnunity. Dallas's early leaders were successful in creating a city that logically should not have existed. Three institutions were crucial in assuring the success of the city: (1) the railroads, (2) the Federal Reserve Bank, and (3) the Texas Centennial Exposition The railroads created a network of efficient transportation which helped to make Dallas a valued location for the Federal Reserve Bank and thus a financial center for the region. As in the case study of New York City, an issue dealing with municipal finance in Dallas will be investigated. It is assumed that Dallas's experience will provide insight into fiscal problems of 164

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165 conservative cities. The tax revolt that reached the plains of Dallas in January 1981 is the issue chosen for analysis. It is consistent with the conservative perspective that, even in a city where taxes are relatively low, the issue of taxes received attention. The immediate cash-flow problem experienced by Nev, York City arose when revenues could not support the growth of expenditures in 1975. Taxes have tra ditionally been high in New York City; yet an "official" tax revolt never developed. This may be attributed to the fact that the city's municipal leaders are oriented towward patronage and an ever-expanding public sector. Ironically, a tax revolt movement crystallized in Dallas in 1981. A referendum limiting the rate of taxation was soundly defeated; yet the mere existence of such a vote is indicative of an inherent resistance to taxes and resistance to an expansive public sector. The resistance of conservative Dallas to government activism may be receding. Evidence of this change can be found in both the data and the defeat of the tax limitation referendum. The data indicate that general expenditures corrected for noncomparable services have actually grown at a faster pace over the past twenty years in Dallas than in New York City. ~lhen only per capita expenditures are considered, Dallas still lives up to its conservative image. This conservative image has been reinforced by a number of factors other than fiscal ones. Image of the City In a real sense, cities project distinct personalities. Dallas tries to project a spirit of dynamic vitality. The Dallas News described the aspirations of that city's residents:

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166 [We have] labored for the material and cultural development of the whole state ... that Texas be known not only as the largest, but also the finest, renowned for its moral sta~dards as well as for the happiness and contentment of its people. Along with this promotion of moral standards, Dallas is also known for its reverence for business. John Bainbride described Dallas as 11 a city of the businessmen, by the businessmen and for the businessmen. 113 Image makers of Dallas extoll values associated with the Protestant work ethic. Values such as material well-being, individualism, indus triousness, and profit making are consistent with the work ethic. There is another side, however, to this industrious, all-American image of a community. Professor Reese McGee, former head of the sociology depart ment at the University of Texas, claimed that, barring Mississippi, the assassination of President Kennedy was most likely to take place in Dallas. His reasons for this assertion were l. The absolutist nature of local thought 2. The institutionalization of personalized violence 3. The proliferation of firearms and the habit of carrying them 4. The political respectability of the radical right 5. The nonexistence, publicly, of a radical left 4 Aside from the Americans for Democratic Action (ADA) voting record of Dallas, which placed it among the most conservative cities in the nation, other factors add to Dallas's conservative image. These factors include the presence of several right-wing organizations, the content of editorials and letters to the editor in the local ne\vspapers, and a hos tility toward liberal politicians. Several nasty events contributed to Dallas's label as the 11 City of Hate. 115 These events included

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l. An unruly crowd jeering at then Senator Lyndon Johnson and his wife 2. U.N. Ambassador Adlai Stevenson's being hit and spat upon by a Dallas citizen 3. The assassination of President Kennedy 167 Violence has marred the image of moral uprightness that leaders of Dallas try to project. While Dallas residents claim that incidents such as those mentioned above could have happened anywhere, the fact of the matter is that the incidents occurred in Dallas. It is reasonable to assume that the political ideology or political culture of Dallas had something to do with these events. The conservative image of Dallas is reinforced by its power structure and politics. Shirley Achor claimed that the informal power structure of business elites in Dallas dominates most decision making. 6 The formal power structure of council-manager government plays only a secondary role. Carol Thometz documented the view that ''the informal power structure in Dallas was a pyramidal quasi-monolithic type, dominated by a select group of business elites. 117 The m ost influential of the groups representing business elites was the Dallas Citizens Council, which was formed in 1937 and by 1970 was composed of 250 chief executives of the city's largest business firms. The Citizens Council operates through its control of individuals or committees. The Citizens Charter Association (CCA), the political arm of the Citizens Council, is the essential cog in establishing control. Achor described the power of the CCA as follows: The CCA selects a business-endorsed slate of candidates for the City Council and backs them with expensive, professionally produced advertising campaigns. Both major newspapers con sistently support the CCA slate, and then candidates consistently

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168 win. Under the system of at-large elections, CCA candidates won a majority on the City council in every election except two in the early 1930s.3 This image of monolithic domination by one elite group is in contrast to the pluralistic image of New York City which is perceived to be too large to be controlled by any one group. New York is more likely to possess independent sovereignties of leadership, as describedy by Sayre and Kaufman. 9 It is indisputable that the image of Dallas conjures up conceptions different from those conjured up by the image of New York. While Dallas's image may not always be positive, its association with economic growth is a source of pride to its residents. The economic growth of Dallas is discussed below. Economic Growth In 1910, the city and county of Dallas had fewer than 100,000 inhabitants and ranked 55th among the cities across the nation. According to the 1980 Census, the city of Dallas is now the seventh largest city in the nation and is still growing. The growth of Dallas developed dramatically in the 1940s as a result of the birth of the aircraft industry in the area. Like other communities in the Southwest, Dallas derived an economic stimulus from military installations during World War II. Unlike other communities, however, Dalla's economy expanded rapidly and grew even after the demobilization following the war. 10 The growth of Dallas's economy has contributed greatly to its strong fiscal position. Peter Wilson stated that due to a booming local economy and cautious financial management, the city of Dallas was in excellent fiscal health. 11

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169 It [Dallas] has a low unemployment rate, a low cost of living, an expanding job market, and a growing tax base. In per capita income, it ranks seventh highest among the 30 largest U.S. cities. At the same time its tax burden is light: an average moderate income family pays about 7.4 percent of its income in state and local taxes, compared to a 9 percent average for the 30 cities as a group.12 Table 7-1 describes the burden plced upon Dallas's residents. This is a low tax burden compared to that for most cities. Table 7-1 Estimated State and Local Tax Burden for a Family of Four, 1977 Annual Income $7,500 $15,000 $30,000 Tax % of % of Amount Income Amount Income Amount Da 11 as $546 7.3 $1,116 7.4 $2,270 Average for 30 Largest Cities 650 8.7 1,348 9.0 2,770 Source: Peter Wilson, The Future of Dallas's Capital Plant (Washington, D.C.: The Urban Institute, 1980), p. 4. % of Income 7.6 9.2 The low tax burden for the City of Dallas probably did not hurt its ability to expand its economic base. Between 1950 and 1970 total employment increased 87.1 percent compared to a decline of 2.6 percent in New York. Between 1954 and 1972 values added by manufacturing increased 278.l percent compared to 73.6 percent in New York, and retail sales

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increased 165.9 percent compared to an increase of only 66.l percent 13 in New York. 170 Peter Wilson noted that during the 1970s much concern was focused on the fiscal crisis in American cities; yet only scant attention was paid to municipal success stories. The future of Dallas's capital plant was explored by Wilson in order to "seek out those cities that have effective public sectors and learn how they are able to maintain the quality of public plants. 1114 Wilson found that Dallas's success in managing capital assets was in part a by-product of its economic health. Dallas was able to channel a substantial share of its federal aid into capital spending and set aside enough revenues for capital spending to limit reliance upon debt. Both of these conditions are luxuries not affordable to declining cities such as New York. Wilson concluded that It is sometimes suggested that the burden of financing new ser vices and capital facilities in growing areas creates fiscal problems rivaling those of the declining central cities. This is certainly not the case in Dallas, nor, one suspects, in other cities in similar economic good health .... This study illus trates how greatly the condition of capital facilities differs in different cities. While conditions improve in cities like Dallas they worsen in many other cities .... For those cities, the Dallas experience should be instructive.15 The historical budget trends of Dallas are provided below. Budget Trends The behavior of budget revenues over the twenty-year period 1959 to 1979 is displayed in Figure 7-l through Figure 7-5. Unlike in the case of New York City, Dallas's budgetary behavior evolved during a period of constant economic growth.

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100 115 ISO 115 100 75 so 25 in Million~ DALLAS: REVENUE SOURCES _. Total Tax es __ Property Ta,
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in Millions 65 60 55 so 45 40 35" 30 15 20 IS 10 5 59 DALLAS: INTERGOVERNMENTAL REVENUE 73-74 Figure 7-2. Dallas: Intergovernmental Revenue

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200 115 IS"O 125 100 75 50 25 1n Millions of$ DALLAS: TOTAL TAXES o..._ _______________________________ _,..._ 59 68 73-74 78-79 Figure 7-3. Dallas: Total Taxes

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in Millions of$ DALLAS: 110 PROPERTY TAXES 110 100 90 80 70 60 50 40 30 20 10 59 63-64 68 73 78-79 Figure 7-4. Dallas: Property Taxes

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in Millions 110 100 90 80 70 60 so 40 30 20 10 59 DALLAS. CHARGES AND MlSCELLANEOUS REVENUE 63 64 68-69 Figure 7-5. Dallas: Charges and Miscellaneous Revenue 7"3-74 78 79 __, ....... U1

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176 Like New York City, Dallas experienced a cutback in expenditures during the recessionary period of the mid-seventies. Unlike New York City, however, Dallas experienced rapidly growing expenditures after the recession. In terms of its local budgets, New York City has not recovered from the recession of the mid-seventies. Differences exist between the two cities in regard to the relative importance of expenditures. Social welfare spending represents the largest category of spending in New York City while it is not a factor in Dallas due to the assumption of public welfare, education, and other functions by the county of Dallas. Urban services, infrastructure, amenity, and overhead represent the largest expenditures in Dallas. This is similar to the relative importance of expenditures in New York City, except that the latter 1 s overhead expenditures are greater than the levels of its amenity expenditures. Infrastructure spending was the most volatile in both cities. Infrastructure suffered deep cutbacks in spending during the years of recession, and a sharp reinstatement of funds thereafter. This is con sistent with the view that it is easiest to cut back from spending with large capital outlays; yet disinvestment from infrastructure cannot be carried out indefinitely. Revenue and expenditure categories between New York City and Dallas are compared below. Relative Importance of Budget Variables One would expect a great deal of difference to exist between the budget patterns of liberal New York City and conservative Dallas. Budgetary patterns for these two cities are compared below. First, the

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in Millions 12.0 110 100 90 80 70 60 so 40 30 20 10 ---DALLAS: EXPENDITURES (URBAN SERVICES, INFRASTRUCTURE, AMENITY, OVERHEAD) Urban Services Infrastructure Amenity Overheacl Urban Services~ Infrastructure . ... e I I e I I ~', I .. ,, ......... . ---~--~---. .,, ..... _,,,, ---r:-~-:-i:.... ,-....... ,,"' Amenity >~-, . ,, _, Ove,hea) -----sq 63-64 60 69 73-74 78-79 Figure 7-6. Dallas: Expenditures (Urban Services, Infrastructure, Amenity, Overhead)

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in Millions of$ 300 200 100 DALLAS: TOTAL EXPENDITURES 0----1-------------------+----------+----------+59 68 09 73-74 78-79 Figure 7-7. Dallas: Total Expenditures

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in Millions 120 110 ,oo 90 80 10 60 ;o 40 30 w 10 59 DALLAS: URBAN SERVICE EXPENDITURES (POLlCE, FIRE, SANlTATION) 63-64 68-69 73-74 Figure 7-8. Dallas: Urban Service Expenditures (Police, Fire, Sanitation)

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in Millions 60 50 40 30 10 ro 5 S9 DALLAS: INFRA5TAUCTURE EXPENDITURES (HIGHWAY. SEWAGE) 68 69 13-74 Figure 7-9. Dallas: Infrastructure Expenditures (Highway, Sewage) 7679 __, o:> 0

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in Millions 50 40 30 20 10 5 59 DALLAS: AMENITY EXPENDITURES (LIBRARY, PARKS AND RECREATION) 63-64 b8-6CJ 73-74 Figure 7-10. Dallas: Amenity Expenditures (Library, Parks and Recreation) 76-79 ..... CP .....

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in Millions 30 25 20 15 10 59 DALLAS: OVERHEAD EXPENDITURES (FINANClAL ADMINISTRATION, GENERAL PUBLIC BUILDINGS, GENERAL CONTROL) 63-64 68-69 13 Figure 7-11. Dallas: Overhead Expenditures (Financial Administration, General Public Buildings, General Control) 78-79 __, 00 N

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183 relative importance of revenue sources and the change in relative importance of these sources is investigated. Table 7-2 Change in Weight of Revenue Sources: Dallas and New York City, 1959-79 Charges and Intergovernmental Total Tax Mi see 11 aneous Revenue Revenue Revenue Year New York Da 11 as New York Da 11 as Ne\'1 York Da 11 as 1959 23 % 2 % 64 % 75 % 13 % 23 % 1979 45 17 43 57 12 26 Change +22 +15 -21 -18 -1 +3 Source: U.S. Department of Commerce, City Government Finances 195960 ~ (Washington, D.C.: U.S. Government Printing Office. 1961 ); U S. Department of Commerce, City Government Finances 1978-79 (Washington, D.C.: U.S. Government Printing Office, 1980). Somewhat similar patterns are discovered in both cities, but a good deal of difference also exists. Intergovernmental revenue grew rapidly in both cities; however, the growth in New York City outpaced the growth in Dallas. In 1959, intergovernmental revenue constituted 23 percent of municipal revenue in New York; by 1979 it comprised 45 percent of all revenue, a net increase of 22 percent. In contrast, intergovernmental revenue in Dallas registered a 15 percent net increase between 1959 and 1979. These figures reflect the increased dependence of all cities on intergovernmental transfers and the greater dependence of liberal cities on these funds.

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184 Given the increases in the relative importance of intergovernmental revenue, it is not surprising that dependence upon total taxes and property taxes has declined. The decline in the relative importance of total taxes was greater in New York City (21 percent) than the decline in Dallas (18 percent), while the decline in the relative importance of property taxes was greater in Dallas (30 percent) than in New York (21 percent). This can only be explained by the fact that nonproperty taxes grew at a faster pace in Dallas than in tlew York City. These taxes included (1) general sales and gross receipts and (2) selected sales and gross receipts. The selected taxes included levies on alcohol, motor fuels, public utilities, and tobacco. Based upon this information, it can be concluded that over the past twenty years Dallas has relied more heavily on nonproperty taxes than has New York City. These taxes are regressive since both rich and poor pay the same rate of taxation on items such as cigarettes and alcohol. The property tax is also con sidered regressive by many, but recently economists have suggested that it is less regressive than previously believed. Henry J. Aaron claimed that defects in property tax administration could be remedied and that th t t 16 e ax was no regressive. While New York City appears to have adopted a conservative strategy of limiting property taxes, the limitations on property taxes was even greater in Dallas. Furthermore, Dallas was more likely to depend upon the regressive selective taxes and to collect revenues from charges and miscellaneous. An identical investigation of relative importance is explored in regard to expenditures for Dallas and New York City. The relative

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Table 7-3 Change in Weight of Expenditure Categories: Dallas and New York City, 1959-79 Year 1959 1979 Change Social Welfare Urban Services Infrastructure New York Dallas New York Dallas New York Dallas 55 % 70 +15 17 % 13 -4 42 % 47 +5 20 % 11 -9 36 % 23 -13 Amenity New York Dallas 3 % 3 0 16 % 18 +2 Government Administration New York Dallas 5 % 3 -2 6 % 12 +6 Source: U.S. Department of Commerce, City Government Finances 1959-60 (Washington, D.C.: U.S. Govern ment Printing Office, 1961); U.S. Department of Commerce, City Government Finances 1978-79 (Washington, D.C.: U.S. Government Printing Office, 1980).

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186 importance of these expenditures is delineated in Table 7~3. A number of differences and similarities are observed in the analysis of Table 7-3. New York City spent a majority of its funds on social welfare categories (public welfare, education, health, and hospital), while Dallas did not assume responsibility for these functions. Increases in the relative importance of social welfare spending in New York was offset by decreases or no change in the relative importance of all other cateogires of spending. The relative importance of three of its four expenditure categories increased in Dallas, only infrastructure suffering a decline in relative value. In both Dallas and New York City, declines in the relative importance of infrastructure spending was the greatest, 9 percent in New York and 13 percent in Dallas. These declines are consistent with the scenario of disinvestment from categories with heavy capital outlays. In many cities infrastructure is in a severe state of decline because of this disinvestment from roads, highways, and bridges reflected in the slow growth of highway expenditures. It is difficult to make comparisons between New York City and Dallas because of the tremendous difference in social welfare respon sibilities between the two cities. For this reason, an analysis of per capita expenditures is delineated in Table 7-4. Table 7-4 describes per capita expenditures for each of the five categories of spending. Per cent differences between per capita spending in both cities, for each category of spending, and the rate of growth in per capita expenditures for each category.

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Table 7-4 Growth of per Capita Expenditures: Dallas and New York City, 1969-79 Social Urban Government Helf are Services Infrastructure Amenity Administration Year New York New York Da 11 as Difference New York Da 11 as Difference New York Dallas Difference New York Da 11 as Difference 1959 $133 $ 42 $ 25 68% $ 48 $22 118% $ 9 $ 9 0% $11 $ 4 175 % 1979 927 176 140 26 143 69 107 32 52 52 45 36 25 Growth 597% 319 % 460% 198% 214% 256% 478% 309% 800% Source: U.S. Department of Corrmerce, Cit Government Finances 1959-60 (Washington, D.C.: U.S. Government Printing Office, 1961) : ment of Commerce, Citt Government Finances 197 8 79 Washington, D.C.: U S. Government Printing Office, 1980). co -....J

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188 During 1979, per capita expenditures for urban services, infra structure, and government administration was higher in New York City, while per capita expenditures for amenities was higher in Dallas. The differences between per capita expenditures in New York City and Dallas in 1959 and 1979 are computed in Table 7-4. For example, in 1959, per capita urban service expenditures were $42 in New York City and $25 in Dallas, or 68 percent higher in New York City. In 1979, per capita urban service expenditures were 26 percent higher in New York, compared to 68 percent in 1959. This decline in per capita difference between Dallas and New York reflects a convergence between the two cities over time. This phenomenon of convergence was also discoverd with regard to infra structure and government administration expenditures. Reductions in the difference between per capita expenditures in 1959 and 1979 are presented in Table 7-4. Index of Relative Success An index of relative success was developed in this study in order to compare the growth of expenditures between the various agencies of government. This index describes the comparative successes of agencies in their efforts to secure public funds. In order to calculate the index, the growth of general expenditures is subtracted from the growth of a particular agency's expenditures and divided by 100. For example, in New York City, health expenditures grew at a rate 130 percent faster than the growth of general expenditures during the period 1959-79. This is reflected in the score on the index of relative success of +l.30 found in Table 7-5. Positive scores on the index reflects categories of expenditures that have grown at a faster pace than general

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189 expenditures; negative scores on the index reflect the opposite. Table 7-5 delineates the relative success of individual municipal agencies in both Dallas and New York City. Table 7-5 Index of Relative Success: Dallas and New York City, 1959-79 Category Public vlelfare Hea 1th Corrections Hos pita 1 s Education Sewage Police Libraries Fire Financial Administration Parks and Recreation Sanitation General Control Highways Score of Index of Relative Success New York +4.99 +1.30 .37 .66 .71 -1 .39 -1 .44 -1. 47 -1 .67 -1.93 -2.56 -2.58 -3.08 -4. l 0 Da 11 as -1.39 +2.29 +3.42 .66 +1.84 + 53 + l. 11 +1.45 -2.28

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190 General Comparison of Both Cities The most obvious difference between the two cities were the phenomenal growth of public welfare expenditures in New York City, and the below average growth of almost all other expenditure categories. Dallas's growth patterns were more balanced: six categories grew at a pace faster than general expenditures and four categories grew at a slower pace. Differences existed between the growth rates of most expenditure categories; however, similarities existed with regard to highway expenditures. In both cities highway expenditures grew at the slowest pace. There is some evidence of a convergence of budgetary behavior in Dallas and New York City. Liberal cities such as New York are perceived to be associated with high taxes, high dependency on intergovernmental revenue, high debt, and high general expenditures. For the most part, this perception is correct and was verified by the data (see Appendix B). Patterns of budgetary growth, however, portray a different picture. While per capita general revenues, per capita general expenditures, and per capita intergovernmental revenue are still higher in liberal cities, the growth of these variables over the past twenty years was higher in conservative cities. Growth of general expenditures, inter governmental revenue, and adjusted debt was higher in Dallas than in New York City for the period under investigation (see Appendix C). Other evidence exists of a convergence between liberal and con servative cities. Cities such as New York (which are considered to be liberal based upon votes of representatives on key ideological issues) have recently been initiating conservative economic policies. Based upon

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191 a personal interview with the deputy comptroller of New York City, it appears that the city has aggressively tried to attract private enter prise through various tax abatement programs. The city has been success ful at revitalizing parts of downtown Manhattan through these tax abatement plans. It has adopted the supply-side strategy of increasing economic growth through limitations on taxes. The fiscal crisis in New York City, described in Chapter 6, is an example of a budgetary issue of importance to liberal cities; namely, how to support large levels of municipal expenditures with a shrinking economic base. The fiscal crisis of 1975 awakened municipal leaders to the fact that expenditure growth had to be curtailed. There is evi dence that budgetary policies in New York City are moving in a more conservative direction. A recent budgetary issue in Dallas provides some evidence that there may be a convergence of views toward municipal finance in liberal and conservative cities. This issue (tax revolt) is described below. Tax Revolt Issue Fiscal problems in Dallas differed from the problems experienced by New York City. In New York expenditures increased more rapidly than revenues. The city borrowed heavily in order to finance growing costs, and, when the city could no longer borrow, it was forced to reduce expenditures. Per capita expenditures and per capita taxes in Dallas are considerably lower than in New York City. Nevertheless, tax reform became an issue in Dallas. The tax revolt fever which began with Cali fornia's Proposition 13 in 1978 reached Dallas by 1981.

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192 The Tax Equality Association (TEA) party mobilized support in their efforts to slash taxes by nearly 30 percent. The TEA party sought to slash the city's tax rate from 56 cents per $100.00 of assessed valuation to 40 cents per $100.00 of assessed valuation. It also sought to place a 5 percent ceiling on annual tax increases as a result of re appraisals.17 The TEA measure was defeated by a 2-1 margin, but a clear message was sent to city hall that residents were concerned about taxes. City officials continued to deal with the issue of tax reform even after the TEA measure was defeated Following the defeat of the tax measure in 1981, a council member, Steve Barttelt, introduced a bill that would enable the city to grant a 20 percent homestead exemption to all home owners and place a 10 percent ceiling on tax increases caused by revalu ation. Barttelt claimed that these measures could provide more long range relief than the original TEA proposition. He believed that the city of Dallas was under pressure to adopt alternative means of tax relief since the initial tax relief measure was defeated. Dallas felt the need to inaugurate austerity programs in 1981 because its officials had miscalculated revenues and expenditures. Residents were asked to offer suggestions as to how money could be saved. They presented the followihg suggestions: l. Create a commuter tax for suburban residents. 2. Establish coin operated lights on tennis courts so users could pay as they go. 3. Issue more citations for literers. 4. Use smaller police cars.18 It is interesting that a tax revolt referendum would arise in a munici pality with relatively low taxes. A Dallas Chamber of Commerce study

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193 noted that the combined state and local tax burdens of Dallas were the second lowest among 19 major U.S. cities. It is normal, however, to expect a conservative city such as Dallas to resist paying taxes and also to resist a large public sector. More significant than the fact that a tax revolt arose in Dallas is the fact that the referendum was soundly defeated. This is an indica tion that residents of Dallas were willing to pay current tax rates and possibly even higher rates. In New York City, in the late seventies, there was a sharp leveling off of tax rates and an indication that the city was unwilling to raise its tax rates. This is further evidence of a budgetary convergence. Summary This chapter has compared the fiscal behavior of Dallas with the fiscal behavior of New York City. A priori, one would expect that the differences in political ideology between the two cities would be trans lated into differences in budgetary behavior. This indeed is verified by the data that reveal per capita taxes, revenues, and expenditures to have been much higher in the liberal city of New York. Size and scope of government w~re greater in New York City; yet the experience of the past few years is contradictory in that the growth of budget variables has actually been greater in conservative cities such as Dallas. Some evidence of a convergence exists. This evidence is delineated in Table 7-6. Growth of budget variables in Dallas outpaced the growth in New York City between 1975 and 1979. This fact provides evidence of a

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194 convergence between the two cities in terms of size of government and tax policy. An interview with the deputy comptroller of New York City, Paul O'Brien, confirmed the movement toward conservative budget policies in New York. According to O'Brien, New York was not only cutting back expenditures but also attempting to stimulate economic activity through supply-side incentives to private enterprise. Voters of Dallas, on the other hand, displayed a willingness to pay at least present levels of taxes by defeating a referendum aimed at rolling back property taxes. Both of these events (conservative economic policy in New York and defeat of the tax referendum in Dallas) provide additional evidence of a budgetary convergence between the two cities. Table 7-6 Growth in Budget Variables: New York City and Dallas, 1975-76 to 1978-79 Property General Taxes Taxes Expenditures Year Dallas New York Da 11 as New York Da 11 as New York 1975-76 $121 $401 $176 $741 $282 $1,716 1978-79 140 433 237 841 410 l ,619 Growth 16 % 8 % 35 % 13 % 45 % -4 % Source: U.S. Department of Commerce, City Government Finances 1975-76 (Washington, D.C.: U.S. Government Printing Office, 1977); U.S. Department of Commerce, City Government Finances 1978-79 (Washing ton, D.C.: U.S. Government Printing Office, 1980).

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Notes 1 sam Acheson, Dallas Yesterday (Dallas: Southern Methodist University Press, 1977), p. iv. 2 Ibid., p. ix. 195 3 John Bainbridge, The Super-Americans (Garden City, N.Y.: Double day, 1961), p. 145. 4 warren Leslie, Dallas Public and Private (New York: Grossman Publishers, 1964), p. 12. 5 shirley Achor, Mexican Amreicans in a Dallas Barrio (Tucson: University of Arizona Press, 1978), p. 54. 6 Ibid., p. 59. 7 carol Thometz, The Decision Makers: The Power Structure of Dallas (Dallas: Southern Methodist University Press, 1963 8 Achor, 61. 9 wallace Sayre and Herbert Kaufman, Governing New York City (New York: Russell Sage, 1960). l OAchor, 263. 11 Peter Wilson, The Future of Dallas Capital Plant (Washington, D.C.: The Urban Institute, 1980), p. 3. 12 Ibid., p. 4. 13 Data are presented in Appendix C. 14 wil son, ix. 15 Ibid., p. 42. 16 Henry V. Aaron, Who Pays the Property Tax? A New View (Washington, D.C.: Brookings Institution, 1976). 17 Henry Tatum, "City Voters Demand True Tax Reforms, 11 Dallas Morning News, January 18, 1981. 18 Henry Tatum, "Citizens Go to Phones to Offer Budget Ideas, 11 Dallas Morning News, February 10, 1981.

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CHAPTER 8 CONCLUSIONS Basic Concerns of Study A basic concern of this study focuses upon exploring the influences of political ideology on policy outputs and outcomes. Policy outcomes were observed by investigating the performance of socioeconomic variables, while policy outputs were measured by examining budgetary allocations in municipalities. The different patterns of budget allocations (outputs) and the differences in performance of socioeconomic variables (outcomes) between groups of cities, identified on the basis of political ideology, were discovered through empirical analysis. Daniel Elazar's view of political culture bears great similarities to this study's conceptualization of ideology. Elazar claimed that culture is a way of thinking, feeling, and believing that not only is learned but also involves selective learning 1 Elazar further concluded that culture had a definite impact on political variables such as partici pation, development of bureaucracy, and amount of government intervention. This dissertation maintains that political ideology, as political culture, reflects a way of thinking, feeling, and believing that has a definite impact on the development of policy outputs and outcomes. Concern centers not only around the empirical distinctions between liberal and conserva tive cities, but also around the differences in values and strategies employed by both ideological groups. 196

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197 Findings of Research A number of discoveries, both anticipated and chance, have been ascertained in this dissertation. It appears that all cities (both liberal and conservative) display evidence of negative changes in the demographic composition of residents. The data indicate that cities are increasingly becoming the refuge of minorities and the elderly. All cities experienced some growth in minority population over the past twenty years, while a majority of cities experienced some growth in the proportion of elderly residents. The proportion of elderly and the growth of minority populations were statistically higher in liberal cities. The investigation of budget outputs in Chapter 5 also revealed some interesting insights. Per capita expenditures in 1978-79 were higher in liberal cities for a majority of expenditure categories. 2 However, growth in per capita expenditures in conservative cities over the past twenty years outpaced the growth rates in liberal cities. 3 This trend demonstrates an interesting phenomenon. There appears to be some what of a convergence of municipal expenditures in liberal and conserva tive cities. While per capita costs are still, for the most part, higher in liberal cities, the gap will eventually close if current trends continue. Further evidence of this convergence theory is provided in the case studies of New York and Dallas. After the fiscal crisis of 1975, New York embarked upon an austerity program where deep cuts in spending were enacted. In addition to this conservative spending behavior, the city began to adapt conservative economic programs. A vigorous effort

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198 was made to attract businesses to the city through a program of tax abatement and other incentives. Parts of downtown Manhattan were revital ized through these conservative economic strategies. Dallas's image as a conservative city is probably as strong as New York's image as a liberal city. In fiscal year 1978-79 per capital general expenditures in Dallas were less than 63 percent of the general expenditures for comparable services in New York City. However, general expenditures grew by 30 percent more in Dallas than in New York over the period of analysis. Further evidence of convergence is illustrated by the defeat of the Tax Equality Association (TEA) party referendum calling for tax reductions of nearly 30 percent in 1981. The defeat of this measure, aimed at lowering taxes and reducing the scope of government, can be interpreted as a repudiation of those wishing to further reduce the size of government. Explanations of why convergence is occurring are numerous. Liberal cities may have been forced to stop expanding services due to the fact that they were limited in the amount of revenue that they could raise. Liberal cities were fearful of raising taxes because of the negative effects tax increases might have on the economic base. These cities were also more dependent upon federal and state transfers. As a result of this dependency, they were more severely affected by the slowing in the growth of federal aid. Conservative cities have, for the most part, experienced economic growth. They could increase government services without worrying about their economic base. New residents also put pressure on existing services and created demands for additional public services. Also new residents from the snowbelt may bring with them

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liberal political values and philosophies which eventually may force conservative leaders to modify their positions. 199 The chance discovery, or serendipity, has always occupied a respected place in science. Abraham Kaplan claimed, however, that the luck find must be appreciated, noticed, explored, and interpreted in order to be a 11 find 11 at al 1. 4 Discussion of one such find in this study is warranted. It was discovered that, while politically San Jose was characterized as liberal and New Orleans conservative, the socioeconomic data of both cities contrasted with the data on other cities in their ideological groups. In contrast to the large increases in total employ ment experienced by most conservative cities, total employment between 1950 and 1970 actually declined in New Orleans. New Orleans' trends in population growth, proportion of elderly, and proportion of minority residents also differed from the experiences of other conservative cities. Demographic and economic patterns in New Orleans, in short, were more closely related to the declining patterns of liberal cities. The economic and demographic trends in San Jose, on the other hand, closely resembled trends in conservative cities. Precisely why these cities are anomalies is beyond the scope of this study. Exploration of factors contributing to this anomalous phenomenon is a fruitful area for future research. This dissertation has focused upon political ideology as an explanation of differences between cities. Other explanatory variables have been employed to explain intercity variation. Interparty competition, political partici pation, unionization, size, region, ethnic composition, and age are explanatory variables that have been investigated in the past. 5

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200 Differences in outputs and outcomes (between groups of cities differ entiated according to political ideology} were identified in this study. The magnitude of difference between specific budget outputs and specific socioeconomic variables was ascertained. Identification of distinctions between groups of cities identified on the basis of ideology, however, does not prove causality. This study has been satisfied in identifying the fact that differences in fact do exist, and in proving a measure of the magnitude of difference. Precisely why differences exist between the two groups is a subject for future research. A wide number of factors may be related to different demographic and economic growth rates in conservative and liberal cities. These cities are for the most part younger, at an earlier stage of economic development, located in "right-to-work" states, have greater amounts of available land at their fringes, and located mostly in the sunbelt. Each of these factors may be important in deter mining why differences exist between the groups of cities. The strength of these factors, as well as the strength of ideology, in determining demographic and economic changes can be determined by application of multiple correlation analysis. Multicollinearity, however, may present a problem as well as the problem created by unmentioned variables in fact causing the relationship. These problems must be addressed in future research if a more in-depth analysis of why the relationship exists is explored. Thomas Dye investigated the impact of taxing, spending, redis tribution, warmth and sunshine, historical development, unionization, and size on economic growth. In an examination of the simple bivariate

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relationships between economic growth in states and the index of redistribution in those states calculated by Booms and Halldorson, 201 Due found that a significant negative correlation existed. 6 A signifi cant negative correlation also existed between unionization and economic growth Both of these measures, one can argue, are surrogates of ideology. These surrogate measures of ideology were more significant than variables such as warmth and sunshine. The findings of Dye cast doubt on the simple sunbelt-snowbelt type of analysis postulated by Kirkpatrick Sale. The question of independent determinants of economic growth is complex. In the past, classical economists attributed economic growth to one or more of the factors of production, such as land, labor, and capital. Today, classical economists attribute growth to factors such as the skill of the labor force (labor) and technological advances which increase the productivity of capital (capital). Dye maintains that these factors are affected by the political environment which includes cultural mores, attitudes toward work, propensities to save, barriers to compe tition, receptivity to technological change, and other matters He asserts that all of these attitudinal, cultural, or ideological factors affect growth. This study agrees with Dye's contention that cultural and ideological values have an effect on socioeconomic variables such as growth. This study, being exploratory in nature, does not address the issue of causality as does Dye's study, but rather demonstrates that differences do in fact exist between ideological groups. Specific find ings of this study include the following facts:

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202 l. Outcomes and outputs differ significantly between ideological groups. 2. While all cities are experiencing some forms of decline, the declines in liberal cities are significantly greater than the declines in conservative cities. 3. One city in each ideological group exhibits characteristics different from the rest of the cities with similar ideologies. 4. Liberal and conservative cities are converging in terms of budget behavior. Growth of per capita spending in conservative cities is actually more robust than that in liberal cities. In addition to these specific findings, two methodological procedures have been developed. These procedures may be utilized in future analysis in order to compare budgetary behavior and municipal budgets in general. They are l. A means of describing the extent of incrementalism in budgeting or the strategy employed by the municipality (across the board or targeting expenditures). This procedure is described in greater detail in Chapter 5. 2. A means of comparing budget variables in cities with noncom parable levels of services. This problem has always plagued comparative urban analysis. Chapter 5 discusses some methods of addressing these problems. The finding that one city in each ideological group exhibited anomalous behavior is of interest. When San Jose and New Orleans were omitted from the analysis, very distinct differences between liberal and conservative

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203 cities were discovered. Liberal cities had lower levels of white population and higher levels of elderly population. 7 Growth of socio economic variables also differed significantly between liberal and conservative cities. Population in liberal cities actually declined by 2.3 percent between 1950 and 1975 while the population in conservative cities grew by 154 percent! The white population in liberal cities declined by 19.2 percent compared to a more modest decline of 5.6 percent in conservative cities. The elderly population grew almost 28 percent faster in liberal cities than in conservative cities. Total employment in liberal cities actually declined by 1 percent while total employment increased by 128.2 percent in conservative cities. Value added by manu facturing and retail sales also grew at slower rates in liberal cities than in conservative cities. The greater decline in socioeconomic variables in liberal cities is reflected in the bond ratings of cities. A statistically significant difference between the changes in bond ratings for liberal and conserva tive cities was discovered. Conservative cities were likely to have an improvement in their bond rating while liberal cities were likely to see their ratings deteriorate. As a result, liberal cities were forced to pay higher rates of interest for their loans. Policy distinctions between liberal and conservative cities were also identified. Even after revenues and expenditures were adjusted for noncomparable levels of service, budgetary differences were discovered between liberal and conservative cities. 8 Liberal cities were character ized by statistically higher levels of per capita general expenditures, per capita intergovernmental revenu~and per capita police expenditures. 9

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------, 204 Speculation as to the factors explaining these differences are numerous. We would expect liberal cities to be more amenable to a large public sector which is characterized by high per capita general expenditures. Interestingly, these high levels of general expenditures have been fueled by large amounts of intergovernmental transfers. Per capita revenues generated by the city's own sources (taxes, charges, and miscellaneous revenue) were not significantly higher in liberal cities. Factors behind the higher levels of intergovernmental revenue received by liberal cities may include greater professionalism, greater political leverage, greater need, or greater willingness to seek outside funds. Whether any of these or other facts relate to the higher level of intergovernmental transfers provides another area of future inquiry. Intuitively one might mistakenly expect conservative cities, due to their concern for law and order, to expend more money per capita on police functions than liberal cities. A possible explanation for this misper ception may be attributed to the relative importance of expenditures. Liberal cities are more likely to expend resources on social welfare functions such as education and public welfare. As a result, the importance of police expenditures is diminished in the municipal budget. Conservative cities, on the other hand, do not assume responsibility for social welfare functions; therefore, police expenditures constitute a larger proportion of the budget. While per capita police expenditures are relatively high in liberal cities, such as New York, the perception of high police costs is negated due to high social welfare expenditures. Implications of higher levels of expenditures in liberal cities fueled by intergovernmental transfers are bad for liberal cities. Given

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205 the present conservative mood (reduce the scope of government) and the diminished political power of cities due to population shifts, it is unlikely that cities can continuously depend upon others (intergovernmen tal aid) to provide assistance. A recent draft report prepared by the Department of Housing and Urban Development argued that, in the past, federal aid to the cities actually contributed to their decline, and 11 d f h tb k h "d lO Th" d ft fl t th t ca e or s arp cu ac s ,n sue a, s ra re ec s e sen 1ments of E. S. Savas, Assistant Secretary for Policy Development, and Robert Carleson, a Reagan domestic policy advisor. If these sentiments are implemented, liberal cities (which have experienced negative socio economic trends) will be faced with serious reductions in expected revenues. Cities in greatest need and with the greatest dependency on outside funds will be most affected. A method of comparing budget strategies was also developed. Differences in the a~ount of growth of individual budget variables illustrate the type of budget strategy employed by a particular city or group of cities. Two strategies compared are the across-the-board strategy and the targeting strategy. These strategies reflect two con trasting views of budgeting. One view is that, in the name of equity, increments or decrements to a budget should be allocated in an equitable manner, each spending category receiving a fair share allocation. This concept of fair share is derived from Aaron \>Jildavsky's expectation that a spending unit will receive some equitable portion of increases or d t ctt ll ecreases 1n aggrega e expen, ures. The other view of budgeting reflects a concern for efficiency rather than equity. Charles Levine stated that an across-the-board strategy does not represent a responsible

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206 management approach since all agencies do not contribute equally to the goals, purposes, and functions of government. 12 Whether more of an across-the-board or targeting strategy is employed can be ascertained by comparison of expenditure growth variance between cities or groups of cities. Means of comparing strategies are discussed in Chapter 5. 13 Differences between liberal and conservative cities have been empirically explored in this dissertation. The differences relate to larger, more fundamental philosophical differences between these two ideologies. The larger differences reflect different values, thought processes, and ways of life. The profound differences between liberal and conservative ideologies relate to the major themes running through this dissertation. Underlying Themes Dynamic vs. Static View of Budgeting In addition to the specific findings enumerated above, a few broad underlying themes run through this dissertation. The investigation of budgetary chang~ is a major concern of this study. It is believed that distinct changes in budget allocations reflect changes in priorities which may be traced to changes in philosophical beliefs of decision makers. Incrementalism has for some time been described as the dominant mode of budgeting. 14 The incremental view of budgeting, however, only reifies the status quo; it focuses upon stability of budgeting while real changes in priorities, that can be observed over time, are obscured. It is believed that exploration of the marginal changes in budget allocations is fruitful in order to understand changes in the budgetary status quo that occurs over time. ---,

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207 Chapter 5 delineated the rates of growth of budget variables over the past twenty years. The incremental view of budgeting maintains that year-to-year changes in allocations are small; therefore, allocation shares between spending units should remain constant and the status quo maintained. Growth rates of individual spending units, however, differed dramatically. For example, over the past twenty years, public welfare expenditures grew 469 percent faster than the average growth of all expenditures. Highway and sanitation expenditures grew 319 percent and 202 percent slower than the average growth of all expenditures over this time period. These data represent a real change in allocation priorities that cannot be adequately explained by the incremental model of budgeting. An alternative model of budgeting views the budgetary process as one involving intense competition between agencies for scarce resources. 15 Allocations are not automatic in this model but are the resultant of a political struggle for funds with definite winners and losers emerging from the battle over resources. The case study of New York City provides evidence that budget allocations are by no means uniformly distributed. Between 1965 and 1975, public welfare expenditures grew by 530 percent while police expenditures grew by 136 percent, fire expenditures by 123 percent, sani tation expenditures by 82 percent, and highway expenditures by 28 percent. Between 1975 and 1979 public welfare expenditures decreased by 18 percent while fire and sanitation expenditures grew by 6 percent and highway expenditures grew by 30 percent. Political ideology provides insight into why these changes in allocations and priorities take place. The large increase in public

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208 welfare expenditures in New York concided with President Johnson's great concern for social justice and the war on poverty. Similarly, cuts in public welfare spending in the late 1970s may reflect growing conserva tive criticism of social programs that proliferated in the late sixties and early seventies. The existence of real change in budget priorities and an examination of why these changes occur lead to the second theme addressed in this study. Ideological Influences on Budgeting The position that budgets are dynamic documents rather than restate ments of the status quo is presented above. Incremental budgeting does not address the issue of change which is essential in order to understand where we are going as a society and what we va 1 ue. The second theme of this dissertation focuses upon political ideology and how ideology may influence resource allocation. Chapters 2 and 3 have delineated the basic differences between liberal and conserva tive philosophies. These differences, no doubt, lead to differing perceptions concerning how to govern. Liberal and conservative ideologies differ in regard to certain basic issues, such as the role of the state, taxes, and means of stimulating growth. Supply-side conservatives reject the Keynesian view that government deficits and an expanded money supply should be used to stimulate spending by consumers and businesses, i.e., stimulate demand. 16 Supply-siders believe that in an unfettered market supply will create its own demand and that policies aimed at stimulating the economy need only be concerned with increasing production. These basic differences in philosophies will affect taxing and spending policy.

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209 The perception that budgeting policy merely reinforces the status .9.!:!Q_ (incremental) or is the result of rational cost-benefit analysis does not seem to explain major spending shifts. On the national level, it has been estimated that defense spending will increase 40 percent in real dollars over the next four years while spending in other areas will decline. 17 An ideological perspective helps to explain this transfer of resources from domestic to military spending. Many liberals feel that the defense spending increases are unnecessary and exhorbitant. Rational cost-benefit analysis cannot in reality make choices which relate to these values. William Gorham maintained that trade-offs between spending on categories such as health, education, welfare, and defense were based upon value judgments and politics. 18 The ideology of decision makers therefore will influence which of these expenditure demands receives preference. A decline in the salience of liberal ideas has probably had some influence on allocations today. Decline of Saliency of Liberal Ideology Erosion of the liberal position provides one possible explanation for budget developments today. The perception that an ever-expanding public sector is desirable has come under attack in recent years. Theodore H. White stated that the election of 1980 marked the rejection of a whole system of ideas that dominated American life since the early 1960s. He stated that the Great Society is an example of good will being pushed too far and rejected by voters. 19 George Will has noted that the Democratic party (with its association with liberal policies) has not received a majority of the white vote since the Johnson landslide of

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210 1964. 20 The detachment of 11 neoliberals 11 such as Gary Hart, Paul Tsongas, and Bill Bradley from discredited social programs of the sixties indicates that many of today's Democratic politicians are aware of voter dissatis faction with liberal programs. Theodore Lowi noted this dissatisfaction, claiming that the sixties resulted in a 11 spectacular paradox 11 where the expansion of the welfare state was accompanied by a growing sense of distrust toward public figures. 21 In the late 1960s a group of prominent social scientists including Daniel Bell, Nathan Glazer, Seymore Martin Lipset, Irving Kristal, and James Q. Wilson banded together and formed a new magazine in order to analyze public policy and its limits and consequences. This group united to make a stand against the armies of alienation in society and were quickly labeled 11 neoconservatives. 1122 The perspective of this group was also enunciated by Norman Podhoretz, editor of Commentary. Podhoretz claimed that Commentary could clearly address the radicalization of the 1960s since many of the magazine's contributors (Glazer, Midge Deeter, Dennis Wrong, Michael Novak, Walter Goodman, Bayard Rustin, Samuel McCracken, Elliot Abrams, and Diane Ravitch) had had some experience with the counterculture movement. In addition to these authors, others who had never been identified with the movement, such as Moynihan, Kristal, Robert Nisbet, Paul Seabury, Jeanne Kirkpatrick, Roger Starr, Paul Weaver, Walter Laquer, and Edward Luftwak, contributed to the magazine. Podhoretz claimed that these authors subjected the ideas of the movement to a sustained critical analysis by writers 11 who could not easily be dis credited and who would not be intimidated. 1123

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211 Podhoretz claimed that the principle of equality of results enun ciated in the sixties represented an assault on what was perhaps the single most distinctive feature of the American tradition: the idea that social justice is satisfied by the distribution of rewards on the basis of individual merit. Podhoretz maintained that it was unrealistic to demand that the ultimate goal of society be the equal distribution of rewards to all. Podhoretz claimed that under the new egalitarian banner, and in the name of justice, it was possible to denigrate the pursuit of success as well as the values traditionally associated with it (ambition, discipline, work). People who possessed these qualities could be stigmatized as exploiters and oppressors; or if they were not themselves especially successful, they could be looked down upon for the meanness of their aspirations.24 Irving Kristel maintained that a problem of the liberal ideology was that it created a welfare state which was on a collision course with working class psychology. 25 Celeste Macleod claimed that problems with liberal philosophies became evident when growing numbers of the working class turned against big government, political idealists, and the entire spec trum of the counterculture, and not against the groups that a Marxist might expect them to rise up against such as multinational banks and multinational corporations. She noted that blue-collar workers lined up against idealists and counterculturalists from the 11 affluent society. 1126 In the 1960s archenemies of workers were said to be hippies and antiwar activists; in the 1970s the new enemies were environmentalists. Macleod stated that in the mid-seventies workers shocked environmentalists by res en ting this movement of 11 cc 11 ege-educated opti onna ires II from the affluent society who believed that the survival of obscure birds were more important than jobs for workers in specific areas.

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Ken Auletta and Robert Eisner promoted the theory that liberal philosophies became captured by greedy special interest groups that 212 were more interested in profiting from the growth of the welfare state than in accomplishing abstract objectives such as ending poverty. Physicians, attorneys, administrators, realtors, and construction com panies are just some of the groups that had vested interests in the expansion of programs to provide health and housing to the poor. 27 Con servatives such as William Simon and M. Stanton Evans look at the factional amounts that actually were expended on the poor and claim that "leaky sieve" liberal programs were failures. Socialists such as Michael Harrington, William Tabb, Manuel Castells, Robert LeKachman, Michael Harvey, David Mermelsteen, and Roger Alcaly believe liberal philosophies are in retreat because the programs implemented did not go far enough in reversing the structural contradic tions of society. They maintained that policies aimed at correcting inequities in the system were doomed to fail since the privatization of profit and other elements of the capitalist structure remained intact. Conservatives such as Milton Friedman view the failure of liberal programs from the perspective of their inability to allocate resources efficiently. To Friedman, the individual spending his own money on himself in a competitive free market would provide the best means of ensuring efficiency. Liberal programs, however, usually do not involve free market decisions but rather bureaucratic decisions where someone (administrators) spends someone else's money (taxpayers') on someone else (recipient of program). This would almost guarantee inefficiency and waste since administrators would have little incentive to economize or

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get the greatest value. Friedman stated that there is little wonder that spending for liberal programs explodes and is ineffective: 213 The bureaucrats spend someone else 1 s many on someone else. Only human kindness, not the much stronger and more dependable spur of self-interest, assures that they will spend the money in the way most beneficial to the recipients. Hence, the wastefulness and ineffectiveness of the spending.29 Friedman goes a step further. He claims not only that inefficiency will result from programs where someone spends someone else 1 s money on others, but that this will lead to a rot in the moral fabric of soceity. It will instill in one group a feeling of God-like power and in another group a feeling of childlike dependence. 30 Reasons for the erosion of the popularity of the liberal perspective are many. A great deal of money and effort was expended in the cities of America in the 1960s. Experts in solving social problems were not success ful in revitalizing our inner cities. Urban problems that existed in the 1960s and 1970s exist today, probably to a greater extent. Cities are losing populations and becoming even more populated by minorities. Urban problems can be ignored for a period of time; yet they will not go away by themselves. Policies must be developed that will address the malaise and reverse the decline. A restatement of the urban problem is delineated below. Restatement of the Problem Problems of the cities have been discussed in the literature for quite some time. A number of different perspectives are addressed by the scholars in the field. Many authors concentrate upon the cultural problems of inner city residents. The cultural perspective was discussed in Chapter 2. Edward Banfield, Daniel Moynihan, and James Q. Wilson all

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214 attribute the problems of our cities to class, family, or the psychologi cal predispositions of city residents. Edward Banfield presented the view that problems of the city are related to the cultural orientation of the lower class. Banfield stated that this class lives from moment to moment, either unable or unwilling to take the future into account He viewed this behavior as making it virtually impossible to improve urban conditions through public policy. 31 Daniel Patrick Moynihan also attributed to cultural factors an explanation for urban problems. However, Banfield emphasized class, whereas Moynihan focused upon the character istics of black families. 32 Moynihan reported that the black family in America was so shattered that any chance for blacks to benefit from federal legislation was precluded. He argued that the matriarchal structures of black families produced an unstable home environment which prevented black children from achieving success at school or in their careErs. Unfulfilled expectations have also been described as a cause for urban problems. James Q. Wilson claimed that there is a psychological urban problem of expectations increasing faster than achievements. 33 Wilson stated that the psychological urban problem cannot be solved, but only coped with. Efforts to lessen the gap between expectations and achievements will in the short run make the discontent produced by the gap more acute. Other authors view the problems of the cities from a radical or socialist perspective. William Tabb claimed that class conflict lies at the heart of the cities' crises. 34 Manuel Castells was more specific, emphasizing that the problem of cities is a result of the privatization

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215 of profits and the socialization of costs such as relocation and pollu tion.35 David Harvey focused upon geographical structure as an indica tor of class relationships. He saw produced and controlled scarcity as generating this structure and leading to the exploitation of the many by the fei-.,. 36 Michael Harrintgon also viewed structural conditions within our capitalist society as leading to tremendous inequities, stressing that the American political and economic system must be made accountable to the laying to waste of urban area. 37 Still others, such as Jane Jacobs and Norton Long, have focused upon neighborhood structure and the economic base. Jane Jacobs contended that "the death of American cities 11 is the result of lack of neighborhood t t 38 ,n egr1 y. In Jacobs' view, urban vitality is centered around the structure of the neighborhood, and urban renewal and other planning approaches may have caused more harm than good by undermining the neigh borhood environment. In order for cities to revitalize, she advocated the intermixing of old and new structures and allowing neighborhoods to serve both residential and commercial functions. Jacobs discussed the internal structure of cities as a leading determinant of urban decline. Other authors have focused upon the external conditions. These conditions include the search for space, changes in transportation technology, movement of labor, the availability of external economies, and flight from taxes. 39 The reaction to these changing conditions exacerbated the decline through white flight, disin vestment in infrastructureand, 11 red-lining 11 in certain neighborhoods. Norton Long claimed that our cities are in danger of turning into Indian reservations11 poor house[s], with a set of suburbanized keepers

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(cops, school teachers, welfare workers, and other bureaucrats) that surrounds a central business district protected by barbed wire. 1140 216 Long recognized the necessity of restoring the city's local economies. Rather than a 11 bricks-and-mortar 11 approach to urban problems, Long focused upon support of human capital. Long claimed that local communi ties are the socioeconomic cells of the larger body politic and that only when these cells are healthy can the nation be healthy. Cities today, however, are for the most part anything but healthy. They are in danger of becoming centers for corporate America, surrounded by a dumping ground for what may be a permanent underclass of society. Unemployment, poor education, crime, alcoholism, drug addiction, and violence mark the ghettos of our inner cities. Some examples of famous individuals climbing out the ghetto to achieve wealth and fame exist; however, opportunity for the vast majority is not great. The Kerner Commission in 1968 reported that our nation was moving toward two societies, one black, one white-separate and unequal 41 There is little to indicate that the situation has changed since 1968. Long claimed that the economic utility of inner cities has vanished, and that there is a great need for the development of low skilled jobs. These jobs were plentiful in the cities at one time but have since moved to areas with stable supplies of cheap labor. High unemployment has led to low feelings of self-esteem on the part of inner-city residents and a deterioration of social controls. Long claimed that cities must invest in what he termed "social capital II in order to combat the frustrations of residents. Long contended that, to date, urban programs have been far too interested in physical structures and

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217 not interested enough in social structures. He blamed this 11 bricks-and mortar" approach on the unions, the construction industry, the real estate industry, banks, architects, planners, bureaucrats, and poli ticians, all of whom had something to gain from the building of even uneconomical monuments. 42 Similar coalitions with a focus on social structures had not, in Long's opinion, been comparably developed. Con stitution Plaza in Hartford and Pruitt-Igoe in St. Louis are examples of the failure of the structural approach. Robert Curvin and Bruce Porter agreed with many of Long's conten tions in their 1979 Ford Foundation study. They studied the 1977 summer lootings in New York City and concluded that the looters suffered from a "spiritual kind of hunger" since they lacked the power to consume at levels encouraged by society. 43 They also demonstrated that a breakdown in the social contract exists. This social contract calls for the indi vidual to accept certain rules and obligations in return for society's protection. The social contract has been undermined in the larger cities over a long period of time. Distrust of governmental authority and the agents of the state (police) who enforce that authority runs deep. Michael Harrington charged that the growth of the welfare state may in a small way have contributed to the deterioration of authority in the cities. He maintained that the welfare state has undermined people's faith in traditional values without replacing those values with anything as enduring. He feared that left-wing values were being summoned to defend "bourgeois hedonism. 1144 Furthermore, the hedonistic values that were being extolled in society could not be satisfied becuse of the stag flation that was gripping the economy. In Jimmy Carter's words, a "crisis

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218 of confidence" resulted from the replacement of traditional values with newer values and the inability to satisfy desires resulting from these new values. A fundamental problem of the cities alluded to by Long is the lack of economic utility in these areas. Long claimed that the state of the inhabitant's employment is the single most important fact about a city. The improvement of the state of employment therefore should be the single most important task of a polity. It is also the most powerful way for the city to earn the loyalty and commitment of its people. 45 In Long's opinion, lack of an economic function leaves the city valueless, power less, a "husk empty of nutrients. 1146 If economic vitality is not achieved, blacks will come to power in the inner city "after it has been been drained dry and left a crumbling mass of structures encumbered with a still largely white public bureaucracy allied with the construction unions in the continued exploitation of what remains. 1147 Both the cities themselves and the poor have a vested interest in upgrading the employ ment of city residents. Long claimed that the public goods of education, health, security, housing, and transportation should all be structured to meet this end. If cities do not address the problems of employment, the dead weight of a dependent population will force other residents to abandon the cities, escaping the burden of heavy taxation by moving to the suburbs. This process has been continuing unabated for years. Greater employment opportunities, however, may slow down or even reverse this process. Cities recognize that they must turn tax recipients into taxpayers with a stake in the larger system. Ghetto residents, surrounded by poor

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219 role models, high crime, drugs, alcohol, poor family relationships, and poor educational systems, find it difficult to break into the mainstream of 11 straight 11 society. As teenage pregnancies among inner-city residents continue to rise, evidence of a permanent underclass mounts. The per manence of this underclass is the real problem of cities and America. George Gilder claimed that our welfare system has contributed to the development of this underclass in America today. He maintained that welfare has eroded family relationships and the work ethic. Instead of helping the poor it has relegated them to the bottom strate of society by misrepresenting the facts of life that prompted previous generations of poor people to escape poverty through the three pillars of work, family, and faith. 48 Today, all cities exhibit signs of decline; yet the decline appears to be sharpest in the liberal cities. Whether ideology is linked to this greater decline is speculative. Burnt-out buildings and garbage-strewn, empty lots, however, are a reality. A coherent urban policy for the eighties has yet to be formulated. Any future policy, as maintained by Long and Gilder, must be formulated with the long-term prosperity of the poor in mind. The necessity of assimilating the bottom strata of society into mainstream America is recognized as a vital necessity for urban America. Our society will not long endure if the bifurcation of ghetto poverty and suburban affluence continues. Notes 1 oaniel Elazar, 11 Introduction, 11 in Daniel J. Elazar and Joseph Zikmund II, eds., The Ecolo of American Political Culture: Readin s (New York: Thomas Y. Crowell Co., 1975 p. 1.

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220 2 Per capita expenditures were higher for the following categories: general expenditures, police, fire, sanitation, sewage, library, financial administration, general control, general public buildings, and other. 3 Growth in per capita expenditures were higher for the following categories: general expenditures, police, fire, sanitation, parks and recreation, financial administration, and highways. 4 Abraham Kaplan, The Conduct of Inquiry (New York: Thomas Y. Crowe 11 Company, Inc. 1964) p. 1 5. 5 Astrid Merget, "The Yearbook (Washington, D.C.: 1980) p. 182. Era of Fiscal Restraint," The 1980 Municipal International City Management Association, 6 Thomas Dye, 11 Taxi ng, Spending and Economic Growth in American States," Journal of Politics (November 1980), pp. 1085-1089. 7 Liberal cities averaged 68.7 percent white while conservative cities averaged 83.6 percent. The elderly population in liberal cities averaged 11.2 percent compared to 8.29 percent in conservative cities. 8 Decision rules for adjusting budgets are described in Chapter 5. This methodology facilitates comparative urban analysis in the area of budgeting. 9 The mean of per capita general expenditures in liberal cities was $551 compared to $345 in conservative cities. Per capita police expenditures averaged $94 in liberal cities in contrast to $59 in con servative cities, while intergovernmental revenue averaged $293 in liberal cities compared to $158 in conservative cities. 1011 Anger of the Wily Stalkers," Time, July 5, 1982, p. 30. 11 Aaron Wildavsky, The Politics of the Budgetary Process (Boston: Litt 1 e, Brown 1964) p. 18 12 charles Levine, "More on Cutback Management: Hard Questions for Hard Times," in Charles Levine, ed., Managing Fiscal Stress (Chatham, N.J.: Chatham House Publishers, Inc., 1980), p. 311. 13 Expenditure growth variance is calculated by subtracting the growth of individual expenditure categories from the growth of general expenditures, squaring the difference, and summing the squared difference. 14 Richard Fenno, The Power of the Purse (Boston: Little, Brown, 1966), pp. 267, 345, 356; Ira Sharkansky, "Agency Requests, Gubernatorial Support, and Budget Success in State Legislatures," Political Science Review, 62 (December 1968), 1223; John P. Crecine, Governmental Problem Soiv,ng (Chicago: Rand McNally, 1969), pp. 206-298; 0. A. Davis, M. A. H. Dempster, and Aaron Wildavsky, "A Theory of the Budgetary Process," American Political Science Review, 60 (September 1966), 530531.

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221 15 Peter Natchez and Irvin Bupp, 11 Policy and Priority in the Budge tary Process, 11 American Political Science Review, 67 (September 1973), 956 16 Martin Feldstein, 11 The Retreat from Keynesian Economics 11 The Public Interest, 64 (Summer 1981), 93. 17 James Fallows, 11 Tov,ard a Sane National Defense," Gainesville Sun, July 4, 1982, p. 4. 18 Aaron vlildavsky, 11 Rescuing Policy Analysis from PPBA, 11 Public Administration Review, 29 (March/April 1969), 189-202. 1911 America's Problem: Trying to Do Everything for Everybody, 11 U.S. News and World Report, July 5, 1982, p. 59. 20 Robert Hoy, 11 Lid on a Bailing Pot, 11 in Robert Whitaker, ed., The New Right Papers (New York: St. Martin's Press, 1982), p. 101. 21 Theodore Lewi, The End of Liberalism (New York: W.W. Norton and Company, 1969), p. 5. 22 Norman Podhoretz, Breaking Ranks (New York: Harper and Row Publishers, 1979), p. 305. 23 Ibid., p. 307. 24 Ibid., p. 292. 25 Irving Kristal, Two Cheers for Capitalism (New York: Basic Books, Inc., 1978), p. 213. 26 celeste Macleod, Horatio Alger, Farewell: The End of the Ameri can Dream (New York: Seaview Books, 1980), p. 178. 27 Michael Harrington, 11 Why the Welfare State Breaks Down, 11 in Irving Howe, ed., Beyond the Welfare State (New York: Schocken Books, 1982) p. 29. 28 Kristol, 231. 29 Milton and Rose Friedman, Free to Choose (New York: Basic Books, Inc., 1981), p. 108. 3 olbid., p. 110. 31 Edward Banfield, The Unheavenly City Revisited (Boston: Little, Brown and Company, 1970), p. 54. 32 Lee Rainwater and \~illiam Yancey, 11 The Moynihan Report : Opposition in the Permanent Government, 11 in Douglas Fox, ed., The New Urban Politics (Pacific Palisades, Calif.: Goodyear Publishing Company, Inc., 1972), pp. 118-128.

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33 James Q. Wilson, "The \i/ar on Cities," The Public Interest, 3 (Spring 1966), 33. 222 34 william Tabb, "Blaming the Victim," in Robert E.. Alcaly and David Mermelstein, eds., The Fiscal Crisis of American Cities (New York: Vintage Books, 1977), p. 326. 35 Manuel Castells, The Economic Crisis and American Society (Princeton, N.J.: Princeton University Press, 1978). 36 David Harvey, Social Justice and the City (Baltimore: Johns Hopkins University Press, 1975). 37 Michael Harrington, Decade of Decision (New York: Simon and Schuster, 1980), p. 186. 38 Jane Jacobs, The Death and Life of Great American Cities (New York: Random House, 1961). 39 Edgar M. Hoover and Raymond Vernon, Anatomy of a Metropolis (Garden City, N.J.: Doubleday, 1962). 40 Norton E. Long, "A Marshall Plan for Cities?" The Public Interest, 46 (Winter 1977), 57. 41 u.s. Commission Report, Re ort of the National Advisor Commission on Civic Disorders (New York: Bantam Books, 1968 p. l. 42 Long, 53. 43 Robert Curvin and Bruce Porter, Blackout Looting! (New York: Gardner Press, Inc., 1979), p. 185. 44 Michael Harrington, "Why the \i/elfare State Breaks Down," in Irving Howe, ed., Beyond the Welfare State (New York: Schocken Books, 1982), p. 39. 45 Norton Long, The Unwalled City (New York: Basic Books, Inc., 1972), p. 162. 46 Ibid., p. 182. 47 Ibid., p. 183. 48 George Gilder, Wealth and Poverty (New York: Basic Books, Inc., 1981 ) p. 122.

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BIBLIOGRAPHY I. Books and Pamphlets Aaron, Henry V. Who Pays the Property Tax? A New View. Washington, D.C.: The Brookings Institution, 1976. Acheson, Sam. Dallas Yesterday. Dallas: Southern Methodist Univer sity Press, 1977. Achor, Shirley. Mexican Americans in a Dallas Barrio. Tucson: Univer sity of Arizona Press, 1978. Agger, Robert; Goldrich, Daniel; and Swanson, Bert. The Rulers and the Ruled. New York: Wiley, 1964. Allison, Graham. Essence of Decision. Boston: Little, Brown, 1971. Auletta, Ken. The Streets Were Paved with Gold. New York: McGraw Hill Book Company, 1972. Bahl, Roy W.; Campbell, Alan K.; and Greytak, David. Taxes,Expenditures and the Economic Base: A Case Study of New York City. New York: Praeger Publishers, 1974. Bainbridge, John. The Super-Americans. Garden City, N.Y.: Doubleday, 1961. Banfield, Edward. The Unheavenly City Revisited. Boston: Little, Brown and Company, 1970. Baradat, Leon. Political Ideologies. Englewood Cliffs, N.J.: Prentice Hall, Inc., 1979. Blumberg, Barbara. The New Deal and the Unemployed. Cranbury, N.J.: Associated University Press, 1979. Bramsted, E. K., and Melhuish, K. J., eds. Western Liberalism. London: The Chaucer Press, 1978. Brock, Clifton. Americans for Democratic Action: Its Role in National Politics. Washington, D.C.: Public Affairs Press, 1962. Butler, Stuart M. Enterprise Zones. New York: Uni verse Books, 1981. Campbell, Alan, and Sacks, Seymour. Metropolitan American. New York: Free Press, 1967. 223

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Cassidy, Robert. Livable Cities. New York: Holt, Rinehart and Winston, 1980. 224 Castells, Manuel. The Economic Crisis and American Society. Princeton, N.J.: Princeton University Press, 1978. Citizens Budget Commission. New York City's Fiscal Crisis: A Re definition. November 1980, Vol. 47, Number 9. Crecine, John. Government Problem Solving: A Computer Simulation Model of Municipal Budgeting. Chicago: Rand McNally, 1969. Curin, Robert, and Porter, Bruce. Blackout Looting! New York: Gardner Press, Inc., 1979. Danziger, James. Making Budgets. Beverly Hills: Sage Publications, Inc., 1978. Drucker, H. M. The Political Uses of Ideology. New York: Harper and Row Publishers, Inc., 1974. Dye, Thomas. Politics, Economics and the Public. Chicago: Rand Mc Nally, 1966. ____ Understanding Public Policy. Englewood Cliffs, N.J.: Prentice Hall, Inc., 1975. Engels, Frederick. The Condition of the English Working Class in 1844. London: International Publishers Company, Inc., 1961. Fenno, Richard. The Power of the Purse. Boston: Little, Brown and Company, 1966. Ferretti, Fred. The Year the Big Apple Went Bust. New York: G. P. Putnam's Sons, 1976. Feuer, Lewis, S. Ideology and the Ideologist. New York: Harper and Row Publishers, 1975. First National City Bank. Profile of a City. New York: McGraw-Hill Book Publishers, 1975. Freeden, Michael. The New Liberalism: An Ideology of Social Reform. Oxford: Oxford University Press, 1978. Friedman, Milton, and Friedman, Rose. Free to Choose. New York: Avon Books, 1979. Gilder, George. Wealth and Poverty. New York: Basic Books, Inc., 1981. Greytak, David; Prares, Donald; and Morley, Elaine. Municipal Output and Performance in New York City. Lexington, Mass.: D.C. Heath and Company, 1976.

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225 Gujarati, Damodar. Pensions and New York City's Fiscal Crisis. Washing ton, D.C.: American Enterprise Institute for Public Policy Research, 1978. Halperin, Morton. Bureaucratic Politics and Foreign Policy. Washington, D.C.: The Brookings Institution, 1974. Harrington, Michael. Decade of Decision. New York: Simon and Schuster, 1980. Harvey, David. Social Justice and the City. Baltimore: Johns Hopkins University Press, 1975. Hoover, Edgar, and Vernon, Raymond. Anatomy of a Metropolis. Garden City, N.Y.: Doubleday, 1962. Hubhouse, L. T. Liberalism. Westport, Conn.: Greenwood Press, 1980. Jacobs, Jane. The Death and Life of Great American Cities. New York: Random House, 1961. Jorstad, Erling. The Politics of Moralism. Minneapolis: Augsberg Publishing House, 1981. Kaplan, Abraham. The Conduct of Inquiry. New York: Thomas Y. Crowell Company, Inc., 1964. Kemp, Jack. An American Renaissance: A Strategy for the 1980s. New York: Berkeley Books, 1979. Kristal, Irving. Two Cheers for Capitalism. New York: Basic Books, Inc., 1978. Leslie, Warren. Dallas Public and Private. New York: Grossman Pub lishers, 1964. Lineberry, Robert, and Sharkansky, Ira. Urban Politics and Public Policy. New York: Harper and Row Publishers, 1978. Long, Norton. The Unwalled City. New York: Basic Books, Inc., 1972. Lowi, Theodore. The End of Liberalism. New York: W.W. Norton and Company, 1969. Macleod, Celeste. Horatio Alger, Farewell: The End of the American Dream. New York: Seaview Books, 1980. Mandel, Ernest. An Introduction to Marxist Economic Theory. New York: Pathfinder Press, 1979.

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226 Mark, Max. Modern Ideologies. New York: St. Martin's Press, 1973. Marx, Karl. Theories of Surplus Value. Moscow: Progress Publishers, 1968. Meltsner, Arnold. The Politics of City Revenue. Berkeley: University of California Press, 1971. Moody, John. Moody's Municipal and Government Manual. London: Moody's Investors Service, Ltd., 1961. Morris, Charles. The Cost of Good Intentions. New York: McGraw-Hill Book Co., 1980. Municipal Year Book 1981. Washington, D.C.: International City Manage ment Association, 1981. Newfield, Jack, and Dubrul, Paul. The Abuse of Power. New York: The Viking Press, 1977. Okin, Arthur. Equity and Efficiency. Washington: The Brookings Institution, 1975. Ouchi, Wi 11 i am. Theory Z. New York: Avon Books, 1981. Perry, David, and Sharkansky, Ira. Urban Politics and Public Policy. New York: H. W. Wilson Company, 1979. Piven, Frances Fox, and Cloward, Richard. Regulating the Poor: The Function of Public Welfare. New York: Random House, 1971. Podhoretz, Norman. Breaking Ranks. New York: Harper and Row Pub lishers, 1979. Riis, Jacob. The Children of the Poor. New York: Garrett Press, Inc., 1970 . How the Other Half Lives. New York: Charles Scribner's ---Sons, 1980. Sayre, Wallace, and Kaufman, Herbert. Governing New York City. New York: Russell Sage, 1960. Sharkansky, Ira. Spending in the American States. Chicago: Rand McNally, 1968. The Politics of Taxing and Spending. New York: The Bobbs Merri 11 Co. Inc. 1969. Simon, William. A Time for Truth. New York: Readers Digest Press, 1978. Tabb, William, and Sawers, Larry, eds. Marxism and the Metropolis. New York: Oxford University Press, 1978.

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227 Therborn, Goran. The Ideology of Power and the Power of Ideology. London: Redwood Burn Ltd., 1980. Thometz, Carol. The Decision Makers: The Power Structure of Dallas. Dallas: Southern Methodist University Press, 1963. U.S. Commission Report. Civic Disorders. Report of the National Advisory Commission on New York: Bantam Books, 1968. Wanniski, Jude. The Way the World Works. New York: Simon and Schuster, 1978. Whitaker, Robert. The New Right Papers. New York: St. Martin's Press, 1982. Wildavsky, Aaron. The Politics of the Budgetary Process. Boston: Little, Brown, 1964. Budgeting: A Comparative Theory of Budgetary Processes. Boston: Little, Brown, 1975. Wilson, Peter. The Future of Dalla~ Capital Plant. Washington, D C.: The Urban Institute, 1980. Wright, Deil. Understanding Intergovernmental Relations. North Scituate, Mass.: Duxbury Press, 1978. II. Articles Alcaly, Roger, and Bodian, Helen. "New York's Fiscal Crisis and the Economy." In Roger Alcaly and David Mermelstein, eds., The Fiscal Crisis of American Cities. New York: Vintage Books, 1977. Allison, Graham. "Conceptual Models and the Cuban Missile Crisis." American Political Science Review 63 (September 1969), 688-718. "Americans for Democratic Action." In Encyclopedia Americana. Vol. 1. Danbury, Conn.: Grolier Press, Inc., 1962. "Anger of the Wily Stalkers," Time, July 5, 1982. Baumol, William. "Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis." American Economic Review 57 (June 1967), 415-426. Briggs, Asa. "The Welfare State in Historical Perspective." In Mayer Zald, ed., Social Welfare Institutions. New York: John Wiley and Sons, 1965. Davis, 0. A.; Dempster, M. A. H.; and Wildavsky, A. "A Theory of the Budgetary Process." American Political Science Review 60 (Septem ber 1960), 529-547.

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Downs, Anthony. 11 Urban Policy." In Joseph A. Pechman, ed., Setting National Priorities: The 1979 Budget. Washington, D.C.: The Brookings Institution, 1978. 228 Dye, Thomas. 11 Taxing, Spending and Economic Growth in American States. 11 Journal of Politics 42:4 (November 1980), 1085-1107. Edel, Mathew. "The New York Crisis as Economic History. 11 In Roger Alcaly and David Mermelstein, eds., The Fiscal Crisis of American Cities. New York: Vintage Books, 1977. Elazar, Daniel. 11 Introduction. 11 In Daniel J. Elazar and Joseph Zikmund II, eds., The Ecology of American Political Culture: Readings. New York: Thomas Y. Crowell Co., 1975. Fallows, James. "Toward a Sane National Defense," Gainesville Sun, 4 July 1982, p. 4. Feldstein, Martin. 11 The Retreat from Keynesian Economics'. 11 The Public Interest 64 (Summer 1981), 92-105. Francis, Samuel T. 11 Message from MARs: The Social Politics of the New Right." In Robert Whitaker, ed., The New Right Papers. New York: St. Martin's Press, 1982. Harrington, Michael. 11 \~hy the Welfare State Breaks Down." In Irving Howe, ed., Beyond the Welfare State. New York: Schucken Books, 1982. Hofferbert, Richard I. "The Relation between Public Policy and Some Structural Environmental Variables in the American States. 11 American Political Science Review 60 (March 1966), 73-82. Hoy, Robert J. "Lid on a Boiling Pot." In Robert Whitaker, ed., The New Right Papers. New York: St. Martin's Press, 1982. Katzelson, Ira. 11 The Crisis of the Capitalist City, Urban Politics and Social Control.'' In Willis D. Hawley, ed., Theoretical Per spectives on Urban Politics. Englewood Cliffs, N.J.: Prent1ce Hall, Inc., 1976. Levine, Charles. "More on Cutback Management: Hard Questions for Hard Times. 11 In Charles Levine, ed., Managing Fiscal Stress. Chatham, N.J.: Chatham House Publishers, Inc., 1980 . "Organizational Decline and Cutback Management. 11 Public ------=A--,-dministration Review 58:4 (July/August 1978), 316-323. Lewis, Carol, and Logalbo, Anthony. "Cutback Principles and Practices: A Checklist for Managers." Public Administration Review 40:2 (March/April 1980), 184-188.

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229 Lichten, Eric. "The Fiscal Crisis of New York City and the Development of Austerity." Insurgent Sociologist 9 (Fall 1979-Winter 1980), 75-92. Long, Norton. "The City as Reservation." The Public Interest 24 (Fall 1971), 22-38. "A Marshall Plan for Cities?" The Public Interest 46 (Winter -~,~977), 48-58. Macpherson, C. B. "The False Roots of Western Democracy. 11 In Fred R. Dallmayr, ed., From Contract to Community. New York: Marcel Dekker, Inc., 1978. Magnuson, Ed. "The Summit That Failed," Time, May 10, 1982, p. 10. Merget, Astid E. "The Era of Fiscal Restraint." In The 1980 Municipal Yearbook. Washington, D.C.: International City Management Association, 1980. Molotch, Harvey. "The City as a Growth Machine." American Journal of Sociology 82 (September 1976), 309-332. Natchez, Peter, and Bupp, Irvin. "Policy and Priority in the Budgetary Process." American Political Science Review 67 (September 1973), 951-963. Nathan, Richard P. "Field Network Evaluation of the Reagan Domestic Program." Public Budgeting and Finance 1:4 (Winter 1981), 85-89. New York Times, January 21, 1981, p. Bl. Peterson, George. "Capital Spending and Capital Obsolescence: The Outlook for Cities." In Roy Bahl, ed., Fiscal Outlook for Cities. Syracuse: Syracuse University Press, 1978. Peterson, Paul E., and Greenston, David J. "Two Competing Models of the Policy-Making Process: The Community Action Controversy as an Empirical Test." In Willis D. Hawley, ed., Theoretical Perspectives on Urban Politics. Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1976. Pyhrr, Peter. "The Zero-Base Approach to Government Budgeting." Public Administration Review 37 (January/February 1977), 1-8. Rainwater, Lee, and Yancey, William. "The Moynihan Report: Opposition in the Permanent Government." In Douglas Fox, ed., The New Urban Politics. Pacific Palisades, Calif.: Goodyear Publishing Company, Inc. 1972. Rothenberg, Randall. "The Neoliberal Club," Esquire, February 1982, pp. 34-46.

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230 Sharkansky, Ira. 11 Agency Requests Gubernatorial Support and Budget Success in State Legislatures." American Political Science Review 62 (December 1968), 1220-1231. 11 Economic Theories of Public Policy: Resource-Policy and Need-Policy Linkages between Income and Welfare Benefits. 11 Midwest Journal of Political Science 15:4 (November 1971), 722-740. Sowell, Thomas. 11 Marx 1 s Capital after One Hundred Years. 11 Howard and J. E. King, eds., The Economics of Marx. Penguin Books, 1976. In M. C. New York: Sternlieb, George. 11 The City as Sandbox." The Public Interest 25 (Fall 1977), 14-21 Sweezy, Paul. "Vietnam: Endless War. 11 In Marvin Gettleman and David Mermelstein, eds., The Failure of American Liberalism. New York: Vintage Books, 1970. Tabb, William. "Blaming the Victim." In Roger E. Alcaly and David Mermelstein, eds., The Fiscal Crisis of American Cities. New York: Vintage Books, 1970. Tatum, Henry. "City Voters Demand True Tax Reforms. 11 Dal las Morning News, January 18, 1981. U.S. News and World Report, May 18, 1981, p. 84. Viguerie, Richard. Right Papers. "Ends and Means 11 In Robert Whitaker, ed., The New New York: St. Martin's Press, 1982. Weyrich, Paul M. "Blue Collar or Blue Blood? The New Right Compared to the Old Right. 11 In Robert Whitaker, ed., The New Right Papers. New York: St. Martin's Press, 1982. Wildavsky, Aaron. "Rescuing Policy Analysis from PPBS. 11 Public Admin istration Review 29 (March/April 1969), 183-202 ---. "Political Implication of Budgetary Reform. 11 Public Administration Review 21 (Autumn 1961), 183-190. Wilson, James Q. 11 The War on Cities." The Public Interest 3 (Spring 1966) 27 -44. III. Government Documents U.S. Department of Commerce. City Government Finances 1959-60. Washing ton, D.C.: U.S. Government Printing Office, 1961. City Government Finances 1965-66. Washington, D. C : U.S. Government Printing Office, 1967.

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---------------231 U.S. Department of Commerce. City Government Finances 1969-70. Washing ton, D.C.: U.S. Government Printing Office, 1971. City Government Finances 1973-74. Washington, D.C.: U.S. Government Printing Office, 1975. City Government Finances 1975-76. Washington, D.C.: U.S. Government Printing Office, 1977. City Government Finances 1976-77. Washington, D.C.: U.S. Government Printing Office, 1978 City Government Finances 1977-78. Washington, D.C.: U.S. Government Printing Office, 1979. ____ City Government Finances 1978-79. Washington, D.C.: U.S. Government Printing Office, 1980. County and City Data Book 1962 Washington, D.C. : U.S. Govern ment Printing Office, 1963 County and City Data Book 1972. Washington, D.C.: U.S. Govern ment Printing Office, 1973 County and City Data Book 1977. Washington, D.C.: U.S. Govern ment Printing Office, 1978 County Government Finances in 1973-74. Washington, D.C.: U.S. Govern m ent Printing Office, 1975. County Government Finances in 1977-78. Washington, D.C.: U.S. Government Printing Office, 1979. Local Government Finances in Selected Metropolitan Areas in 1965-66 Washington, D.C.: U S Government Printing Office, 1967. Local Government Finances in Selected Metropolitan Areas in 1969-70. Washington, D.C.: U.S. Government Printing Office, 1971. Statistics of Public Elementary and Secondary Day Schools, Fall 1969. Washington, D.C.: U.S. Government Printing Office, 1970 Statistics of Public Elementary and Secondary Day Schools, Fall 1973. Washington, D.C.: U.S. Government Printing Office, 1974. Statistics of Public Elementary and Secondary Day Schools, Fall 1977. Washington, D.C.: U.S. Government Printing Office, 1978.

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APPENDIX A AMERICANS FOR DEMOCRATIC ACTION SCORES, BY DISTRICTS WITHIN CITIES New York District Year 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1980 72 78 72 50 89 78 78 94 44 94 78 100 72 94 1979 79 68 74 63 84 89 95 95 37 68 84 100 84 100 1978 70 90 55 70 100 80 95 35 100 35 58 80 100 79 80 N 1977 80 90 70 85 95 90 95 45 100 40 l 00 100 95 w N 1976 90 l 00 55 50 95 84 95 95 58 l 00 45 100 l 00 85 90 1975 95 89 53 53 95 95 100 95 50 95 50 100 l 00 100 100 1974 83 96 61 32 100 100 50 91 95 100 100 95 1973 83 l 00 48 57 100 100 52 96 100 100 l 00 l 00 1972 94 l 00 31 56 75 69 l 00 25 63 38 100 94 100 l 00 75 1971 76 l 00 24 65 78 97 86 49 89 43 92 92 l 00 92 100 Average 82 91 52 55 84 91 91 80 53 99 44 89 92 100 90 93 City Average 80

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Philadelphia District Year 1 2 3 4 13 1 2 1980 72 39 44 1979 100 5 21 1978 50 50 25 55 1977 60 55 35 40 1976 71 95 35 73 55 1975 81 78 53 89 74 1974 71 75 83 73 75 95 50 1973 83 91 88 80 36 95 82 1972 81 88 100 81 38 31 63 1971 70 84 86 81 49 68 57 Average 69 83 77 66 41 75 60 City Average 67 68 Chicago District 5 7 8 9 44 89 50 100 53 79 63 95 40 65 50 100 50 75 45 95 50 70 50 90 71 100 61 100 89 50 100 100 68 96 31 38 94 49 62 100 49 83 54 97 11 8 56 43 40 45 55 60 47 78 57 75 72 76 63 69 68 78 55 73 77 Boston District 9 72 79 75 80 85 100 77 88 82 11 72 63 60 84 65 94 86 75 N w w

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Los Angelesa Detroit Cleveland District District District 21 23 24 25 28 29 1 14 15 16 17 18 20 21 1980 94 83 89 94 89 78 78 67 94 72 67 78 1979 100 95 84 79 74 79 68 58 100 79 68 95 1978 70 80 90 85 75 45 40 60 50 85 65 60 85 1977 85 90 80 100 60 85 55 50 70 80 60 65 90 1976 90 80 100 100 70 75 70 60 78 85 70 85 1975 100 89 100 94 84 83 84 94 67 100 95 94 1974 86 95 100 95 79 72 60 90 100 1973 79 100 100 96 95 83 87 83 74 100 1972 94 88 88 92 31 91 88 75 75 63 31 56 82 1971 81 84 84 93 24 73 76 84 78 76 49 76 89 Average 86 90 86 77 80 80 74 72 67 78 74 70 90 City Average 85 74 80 N w -+'>

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Columbus Milwaulkee Memphis Houston San Antonio Da 11 as Phoenix District District District District District District District Year 15 4 5 12 8 7 8 18 20 21 3 5 l 1980 28 61 89 83 6 83 72 0 11 50 0 1979 21 53 95 79 0 84 74 0 0 42 11 1978 25 40 80 5 70 10 75 70 10 40 15 1977 35 40 90 15 75 5 90 30 5 60 5 1976 10 50 95 5 80 0 75 75 53 21 0 11 0 1975 21 58 95 0 88 0 89 89 47 32 0 6 13 1974 26 50 96 4 0 95 91 45 9 8 6 1973 25 56 88 0 8 96 100 65 0 32 4 1972 6 44 l 00 0 0 6 94 56 6 6 6 1971 11 38 97 8 0 5 94 57 0 8 11 Average 21 49 93 5 4 89 87 57 15 5 31 7 City Average 13 71 79 60 36 18 7 N w u,

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New Orleans San Francisco San Jose San Diego Baltimore Indianapolis District District District District District District Year 1 2 5 6 13 41 42 3 7 6 1980 11 50 94 83 83 89 89 28 1979 11 42 84 95 79 74 100 32 1978 10 45 80 95 80 15 60 75 90 25 1977 0 30 100 85 80 0 60 60 90 40 1976 10 30 100 95 95 0 80 70 95 50 1975 5 47 95 94 95 13 79 84 88 68 1974 6 36 92 95 9 87 100 100 1973 6 73 100 0 83 96 100 1972 0 100 100 6 88 88 81 88 0 1971 0 92 32 14 76 76 73 100 3 Average 6 44 93 87 66 25 77 88 94 31 City Average 25 90 66 51 91 31 aAn effort was made to record scores for the same geographic area regardless of the district number. In Los Angeles, district numbers representing the same area changed. The area represented by the 23rd disN trict from 1974 to 1980 was represented by the 26th district before 1973. Similarly, the area of the 25th w 0)

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district was represented by the 30th district before 1973. Scores represent the districts corresponding to the city's geographic boundaries. Blanks represent periods when new representatives were elected and scores were not available. A period of 10 years was viewed as sufficient to establish an index of political philoso phy. N w ..._.,

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Ranking in 1981 APPENDIX B CHI-SQUARE VALUES 2 2 2 x2 = ((7-9)) .5) + ((5-3) .5) + ((8-6) .5) + 9 3 6 ( ( 0-2) 5) 2 2 = .25 + .75 + .375 + 1.125 = 2.5. Trend of Rankings X2 = ((l -3.5) .5) 2 + ((5-2.5) .5) 2 ((6-3.5) .5) 2 + 3.5 2.5 + 2.5 ((0-2.5) .5) 2 2.5 = .7225 + 1.6 + .2857 + 1.6 = 4.2092. 238

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APPENDIX C PERFORMANCE OF SOCIOECONOMIC VARIABLES % Change Serious l Ch,,nge % Ch,,nge 1 Cha 119e I Change 1 ChJnge 1n 1n M e dian 1 4 Years l Below Cri rri c in P o puin White in Elderly in Tota I Value Ad d ed by % Change in f J ml ly High S c h o ol Po v erty Kno m p er lat Ion, Population, Po p ulation. Employm e nt, Manufacturing, Retail Sales, 1 n c oine or M ore, Level, 100,0 0 0, CI ty 1950-75 195070 1950-70 1950-70 1954-70 1954-72 1954-72 1970 1970 1 9 70 Libera 1 Cities San Francisco -14 3 -19. 9 +45.8 -3. 7 46. 7 70. 2 195.3 61.8 9 9 9,864 Ba 1t I more -10. 3 -30.4 +43 2 -9 9 107 6 46 4 169.1 34 .3 14 0 8,267 New York -5 2 -15 .4 +57 1 -2 .6 73. 6 66 1 174 3 46. 9 11. 5 7,771 Boston -20.6 -13 4 +31.9 -14 5 79 8 27 0 181. 1 53. 5 11. 7 12,648 Oetrol t -27 8 -33 5 +101.B -26.0 62. 5 6 8 153.8 41.8 11.3 11,662 Cleveland -30.1 -27 0 +35 9 -26.6 48 4 2 4 157. 7 37. 4 13. 5 9,049 Chicago -14. 4 -23 .2 +39. 5 -14. 1 62.J 49.3 158.8 43. 9 10.6 7,610 Ht lwaukee +4.5 -12 .3 +35.8 +5.9 90.J 49.4 169 9 49.2 8 1 5,785 Los Angeles +38.4 -13 2 +5. 2 +43.9 129 4 112 .3 194. 5 62.0 9.9 8.191 N w Me m ph ts +67 0 -3.0 +28.0 +43.9 259 1 182 4 202 4 50 l 15 7 8,211 <..O San Jose +483 0 -3.9 -45. 1 +359. 5 312. 7 388. 5 201.5 39. 9 11. 2 4,639 Ph1 ladelphh -12 3 -19 5 +41.0 -7. 7 51. 5 45 3 181.8 65.3 6 4 7,933 Hean +41 9 -17. 9 +35 .1 +29 0 110.3 87 .2 178.3 48.8 11.1 8,469 Standard Oev1at1on 141. 7 9.6 33.8 106.7 86.4 106.5 17 .2 10.2 2.5 2,206 Conservative C1t1es Phoenix +522. 0 3 +4 .8 +486 9 1740. 3 417 .9 211. 5 58.9 8.8 11.391 Dallas +37 .1 -14.4 +29 .5 +87 1 278.1 165 9 183.9 54. 2 10.1 11,616 Haus ton + 123 0 -6 7 +30 0 +104.4 288.4 257. 2 191. 4 51.8 10 7 6,950 San 01 ego +131.0 -5.6 +6.0 +114 6 137 .0 213 8 185.8 66.2 9. 3 7,755 San Antonio +89 J -1.1 +35.5 +60.1 275.0 193.5 187 .9 42. 7 17. 5 7,629 Jnd ianapol ts +83 l -4 0 0 +72.1 286.5 175 7 204 2 55.4 6.8 7,835 Colu m bus +42. 5 -7 4 -2 .3 +42.4 150.0 146 2 165.8 55 6 9.8 9,389 flew Orleans -2.0 -19.1 +51 .0 -3 3 143.2 81.3 169.0 42. J 21.0 7,110 Mean + 134 5 -7 3 +19 3 +188 0 412 3 206.4 187 .4 53 4 11. 8 8,709 Standard Deviation 162.3 6.5 19.7 224.6 541 0 100.0 15.6 8.0 4. 9 1,874 Standard Error of O t ff ere nee 72 3 4.1 14.0 79 0 167. 7 168.4 66 6 4.5 1.8 1000 5

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APPENDIX D STANDARD ERROR OF DIFFERENCE Standard error of difference is calculated by taking the square root of the following equations: where: N 1 (st. deviation of group 1) 2 + N 2 (st. deviation of group 2) 2 ( Nl + N2 2) x N 1 = total number in first group (liberal) N 2 = total number in second group (conservative). Debrees of freedom: 18. The square roots of the following equations have been calculated: Change in value added by manufacturing: 12 (86.4) 2 + 8 (541) 2 f_l + _l] 18 X l 12 8 = 167. 7. Change in retail sales: 12 ( l 06. 5) 2 + 8 ( l 00) 2 = ( l l ] 18 12 + 8 = 168.4. Median Income: 12 (788) 2 +8 (1205) 2 ( l l] = 18 X l2 + 8 470. Change in median income: 12 (178.3) 2 + 3 (15.6) 2 r l l J 18 X l12 + 8 = 66.6. 240

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241 Change in population: 12 (141.7) 2 + 8 (162.3) 2 x ( l 1} = 18 12+8) 72.3. White population 1970: 12 ( 12. 5 )2 + 8 ( 162. 3 )2 ( l l J = 18 X l2 + BJ 6. Change in white population: 12 (9.6) 2 + 8 (6.5) 2 (-1 + _l) = 4 l 18 X 12 8 Elderly 1970: 12 (2. 1) 2 + 8 (l.2) 2 = ( 1 1] 18 T2 + 8 = 9 Change in Elderly: 12 (33.8) 2 + 8 (19.7) 2 = (-1 + _,] = 12 8 14 Change in total employment: 12(106.7) 2 +8 (224.6) 2 (-1 + _lJ 18 X 12 lfJ = 79 Hi g h school or higher education: 12 (10.2) 2 + 8 (224.6) 2 (-1 + _l] 18 X 12 8 = 4 5 Percentage below poverty: 12 (2 5) 2 + 8 (4.9) 2 (-1 + _l] 18 X 12 8 1. 3 Serious crime: 12 (2206) 2 + 8 (1874) 2 (-1 + J__] = X 12 8 1000. 5. 18

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Figures must be computed when there are 16 degrees of freedom (San Jose and New Orleans omitted). Degrees of freedom: 16 Change in population: 11 (29.5) 2 + 7 (165) 2 ( l l] = 16 x TT+8 47. Change in white population: 11 (9) 2 + 7 (4.7) 2 (-, +-,] = 16 X 11 7 3 9 Change in elderly population: 11 ( 23. 5) 2 + 7 ( 4. 7) 2 (-1 + _l J = 16 X 11 7) 11.9. Change in total employment: 11 (24.2) 2 + 7 (155 8) 2 (-, + _l_) = 16 X 11 7 5 o. 3 Change in median income: 11 (66.5) 2 + 7 (57.2) 2 X (-1 + _l] 16 11 7 = 3 .1. Change in value added: 11 (66.5) 2 + 7 (57.2) 2 ( l l] = 16 x TT+T 32.3. Change in retail sales: 11 (50.7) 2 + 7 (92.6) 2 X (if++) = 35.9. 16 v/hite population 1970: 11 (10 7) 2 + 7 (8.1 ) 2 X (,+ + +) = 5.0. 16 242

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243 Elderly population 1970: 11 {l.4)2 + 7 (8. 1) 2 (-1 + _l] 16 X 11 7 = 6. High school or higher education: 11 (9.2) 2 + 7 (7. 1) 2 x(J + +] = 4.3. 16 Percent below poverty level: 11 (2. 1) 2 + 7 (3.4)2 X (J + +] = l. 4 16 Median income 1969: 11 (687) 2 + 7 {958} 2 X (if++] = 412. 16 Serious crime: 11 (2306) 2 + 7 (1901) 2 X (-1 +j_) = 1106. 16 11 7

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APPENDIX E NUMBERS OF SERVICES ASSUMED BY CITIES Number of Services (20 Years) City Total Ed. Hosp. Hea. P.W. Pol. Fire San. Hwy. Sew. Haus. Lib. P.&R. F.A G.C. G.P B. New York 15 Baltimore 14 0 San Francisco 14 0 l Boston 13 0 0 l Philadelphia 13 0 0 l Chicago 13 0 1 0 l l Detroit 13 0 0 1 New Orleans 12 0 0 0 N San Antonio 10 0 0 0 0 0 Cleveland 10 0 0 0 0 l 0 Da 11 as 10 0 0 0 0 0 Houston 10 0 0 0 0 l' 0 Los Angeles 11 0 0 0 0 l Milwaukee 10 0 0 0 0 0 l Indianapolis 8 0 0 0 0 0 0 0 Columbus 8 0 0 0 0 0 0 0 M e mphis 9 0 0 0 0 0 0 Phoenix 9 0 0 0 0 0 1 0 San Diego 9 0 0 0 0 0 0 San Jose 9 0 0 0 0 l 0 l 0 Totals 4 6 7 3 20 20 20 20 20 10 16 20 20 20 14 Key: l = service P.W. public welfare Hous. = housing 2 = no service Pol. police Lib. = library Ed. = education San. = sanitation P.&R. = parks and recreation Hosp. = hospital Hwy. highway F.A. = financial administration Hea. = hea 1th Sew. = sewage G-C. = general control G.P.B. = general public buildings

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APPENDIX F PER CAPITA REVENUES, FYl 97879 : Intergovernment Revenue Charges and MiscelState laneous General City % Total State Federal Revenue Taxes Revenue Debt Liberal Cities Bal ti more 64 $434 $276 $158 $ 74 $143 $684 $370 Boston 63 383 241 142 77 340 800 341 Chicago 29 157 46 111 27 194 379 225 N Cleveland 8 240 18 222 l 09 148 497 562 (.Tl Detroit 50 390 194 196 113 177 679 498 New York 83 341 282 59 341 85 767 866 San Francisco 60 501 300 201 212 190 523 562 Memphis 69 342 236 l 06 131 41 556 834 Milwaukee 71 232 165 67 71 124 427 273 Los Angeles 41 189 78 111 100 179 468 756 Philadelphia 65 192 124 68 192 313 604 812 San Jose 51 112 57 55 l 01 154 367 252 Mean 55 293 168 125 129 174 563 529 S.D. 21 122 l 01 59 84 84 146 241

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Intergovernment Revenue Charges and MiscelState laneous General City % Total State Federal Revenue Taxes Revenue Debt Conservative Cities Dallas 9 $ 71 $ 6 $ 65 $ 97 $225 $393 $590 Houston 9 59 5 54 86 195 340 567 Indianapolis 49 242 119 123 64 125 380 383 Phoenix 45 218 98 120 81 154 453 614 San Antonio 8 103 8 95 75 68 246 1055 San Diego 44 162 72 90 162 118 384 139 Columbus 26 15 l 39 112 105 128 383 821 New Orleans 21 261 56 205 124 164 549 668 Mean 26 158 50 64 99 147 391 605 S.D. 17 77 44 46 31 49 87 273 Standard Error 9 51 40 26 33 35 61 122 of Difference

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APPENDIX G PER CAPITA EXPENDITURES, FYl 978-T9 Gen. City Exp. Pol. Fire San. Hwy. Sew. Lib. p. & R. F.A. G.C. G.P.B. Other Liberal Cities Baltimore $696 $ 94 $47 $30 $68 $ 22 $12 $ 46 $17 $37 $ 5 $238 Boston 799 124 85 28 32 17 20 34 18 46 15 274 Chicago 364 114 35 29 27 9 9 5 8 5 7 84 Cleveland 551 99 43 27 29 76 N.A. 17 11 18 10 142 N Detroit 614 141 38 25 37 86 11 68 18 25 11 l 05 +:> ..__., New York 624 90 44 39 30 25 12 20 14 22 9 214 San Francisco 825 88 59 8 23 144 12 84 23 48 9 41 Los Angeles 360 90 35 14 29 9 6 27 10 13 8 71 Memphis 452 55 47 33 37 27 N.A. 38 9 19 11 33 Milwaukee 378 75 37 30 45 38 12 17 13 N.A. 8 54 Philadelphia 663 112 35 38 29 53 9 34 11 43 17 152 San Jose 292 51 29 3 38 29 N.A. 35 N A. N.A. N.A. N.A. Mean 551 94 44 25 35 45 11 33 14 28 10 128 S.D. 180 26 15 11 12 40 4 24 5 15 3 83

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Gen. City Exp. Pol. Fire San. Hwy. Sew. Lib. P. & R. F .A. G.C. G.P.B. Other Conservative Cities Da 11 as $393 $71 $37 $32 $43 $25 $13 $40 $10 $ 8 $18 $ 60 Houston 335 58 39 15 27 49 6 20 9 6 l 57 Indianapolis 391 47 23 11 57 41 N.A. 27 7 17 5 41 Phoenix 444 82 35 26 62 31 N.A. 33 N.A. N.A. N.A. N.A. San Antonio 259 40 21 14 22 40 4 36 6 6 2 48 San Diego 276 48 27 14 24 28 5 44 7 12 7 34 Columbus 474 67 42 24 46 64 N.A. 45 10 14 12 108 New Orleans 485 56 28 20 41 27 5 51 14 31 12 120 Mean 345 59 32 20 40 38 7 37 9 13 8 67 S.D. 133 14 8 7 l 5 13 4 10 3 9 6 34 Standard Error of Difference 78 11 6 5 6 15 2 9 2 6 2 33 Degrees of Freedom 18 18 18 18 18 18 12 18 16 15 16 16 Key: Gen. Exp. = general expenditures Sew. = sewage G.C. = general control Pol. = police Lib. = library G.P.B. = general public buildings San = sanitation P. & R. = parks and recreation N +:> H~-1y. highway F.A. = financial administration OJ =

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City Baltimore Boston Chicago Cleveland Detroit New Yor k San Francisco Los Angeles Memphis Milwaukee Philadelphia San Jose Mean S.D. Da 11 as Houston Indiana Phoenix APPENDIX H REVENUE GROWTH, 1959-79 Charges and InterMiscelgovernmental laneous Revenue Revenue Ta x es Liberal Cities l 010 % 393 % 393 % 1319 235 300 824 93 223 1400 506 83 1119 653 59 1794 1000 77 1756 910 192 122 456 231 l 079 l 091 1267 563 274 170 2300 773 306 331 173 59 1135 546 280 632 337 329 Conse r vative Cities 7000 1867 2100 772 506 740 482 636 249 333 324 279 633 General Revenue 695 % 492 316 332 330 691 363 198 l 095 327 464 129 453 265 470 476 591 695 Debt 44 % 68 6 141 144 64 l 07 184 77 112 135 123 100 50 150 123 141 279

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Intergovernmental City Revenue San Antonio 3333 % San Diego 1925 Columbus 907 New Orleans 1350 Mean 2407 S.D. 2022 Standard Error of 659 Difference Charges and Miscellaneous Revenue 650 % 523 425 359 540 127 131 250 General Taxes Revenue Debt 74 % 373 % 461 % 195 419 67 80 261 383 256 503 282 272 473 236 177 132 138 134 l 07 46

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l~en. City Exp. Pol. Fire Baltimore 557 % 348 % 262 % Bos ton 440 359 325 Chicago 300 470 338 Cleveland 451 395 291 N ()1 Detroit 502 605 375 ...... New York 457 348 340 San Francisco 565 389 247 Los Angeles 319 429 250 Memphis 595 686 488 Milwaukee 250 317 270 Philadelphia 595 600 338 San Jose N.A. 629 222 Mean 458 465 312 S.D. 122 130 73 APPENDIX I EXPENDITURE GROWTH, 1959-79 San. Hwy. Sew. Liberal Cities 400 % 253 % 214 % 180 220 750 263 8 80 125 93 660 127 208 1129 225 67 400 267 409 3500 180 142 -10 313 185 350 233 30 171 375 190 657 200 58 190 232 156 644 90 114 964 Lib. P. & G. F.A. G.C. G.P.B. Other 300 % 667 % 467 % 1750 % 25 % 3300 % 300 325 350 411 650 621 350 150 300 67 250 1300 N.A. 69 l 000 350 900 1675 11 325 500 1150 450 950 300 333 367 175 350 2957 500 300 360 433 50 356 6 200 400 550 300 1675 N.A. 375 800 1700 N.A. 725 300 240 225 N.A. 60 575 350 386 175 514 750 1800 N.A. 483 N.A. N.A. N.A. N.A. 269 296 449 710 379 1449 160 178 246 607 307 968

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Gen. City Exp. Pol. Fire San. Hwy. Sew. Lib. P. & G. F.A. G.C. G.P.B. Other Conservative Cities Dallas 487 % 689 % 429 % 540 % 258 % 317 % 13 % 567 % 900 % 700 % N.A. 400 % Houston 584 729 550 400 145 512 6 567 800 500 0 2750 Indianapolis 436 370 130 57 533 86 N A. 350 600 750 N.A. 1267 Columbus 577 644 367 380 171 814 N.A. l 025 900 367 1100 2060 Phoenix 865 1267 600 420 1140 675 N.A. 1000 N.A. N A. N.A. N.A. San Anotnio 429 567 320 367 69 344 300 1100 500 500 N.A. 2300 San Diego 283 380 59 8 23 144 12 84 23 48 9 41 New Orleans 402 460 300 300 193 170 150 940 367 343 300 367 Mean 508 638 344 259 317 383 96 704 584 458 352 1178 S. D. 174 288 187 203 367 263 129 368 320 237 518 1146 Standard Error of Difference 70 l 00 63 70 119 368 39 130 134 237 195 502 Degrees of F.reedom l 18 18 18 18 18 12 18 16 16 14 16 Key: Gen. Exp. = general expenditures Sew. = sewage G.C. = general control Pol. = police Lib. = library G.P.B. = general public buildings San. = sanitation P. & R. = parks and recreation N 01 Hwy. = highway F.A. = financial administration N

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BIOGRAPHICAL SKETCH Steven G. Koven was born in Brooklyn, New York, and graduated from Erasmus Hall High School in 1964. After graduation from the City College of New York in 1968, Mr. Koven served as a combat infantry man in Vietnam. Upon discharge, he resumed his schooling at Baruch College, where he received a master's degree in business administration in 1975. While attending Baruch College, Mr. Koven also worked in several agencies of the federal government. After moving to the state of Florida, he pursued graduate studies in the field of political science at Florida Atlantic University and the University of Florida. In December 1982 he received the degree of Doctor of Philosophy,with a major in political science, from the University of Florida. 253

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I certify that I have read this study and that in my opinion it conforms to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the degree of Doctor of Philosophy. I certify that I conforms to acceptable adequate, in scope and Doctor of Philosophy. I certify that I conforms to acceptable adequate, in scope and Doctor of Philosophy. Bert E. Swanson, Chairman Professor of Political Science have read this study and that in my op1n1on it standards of scholarly presentation and is fully qua l ity, as a d'i ~:~rta ti on~or the degree of i 1 C~ t ,,0. ">::;;, ~_Q s:cc/4! Alfre d-----8. Clubok Professor of Political Science have read this study and that in my opinion it standards of scholarly presentation and is fully quality, as a dissertation for the degree of William A. Kelso Associate Professor Science of Political I certify that I have read this study and that in my op1n1on it conforms to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the degree of Doctor of Philosophy. ,;//J:-,/4~ ~::<1L /'/. 1i:r~ , James vJ. Button J, / Associate Professor of Political Science

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---------I certify that I have read this study and that in my opinion it conforms to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the degree of Doctor of Philosophy. 1 John M. 1 Ni c:kens 0 Associate Professor of Educational 1., / Administration and Supervision This dissertation was submitted to the Graduate Faculty of the Department of Political Science in the College of Liberal Arts and Sciences and to the Graduate Council, and was accepted as partial fulfillment of the requirements for the degree of Doctor of Philosophy. December 1982 Dean for Graduate Studies and Research

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