Tag: Chicago

After decades of living in the shadows not only of New York, but such emergent regions as Los Angeles, the San Francisco Bay Area, Atlanta, Houston and Dallas, Chicago suddenly seems to be on a roll. It may be very close to placing its “favorite son” – Senator Barack Obama – as our next President, with all the enormous increase in prestige and patronage that entails. It could win the 2016 Olympics. And recently, Fast Company, the trendoid business magazine for the perennially hip and cool, named it America’s “city of the year.”

How you view Chicago’s rise has much to do with who you are. For many working and middle class Chicagoans, the changes in recent years have been far from favorable, as our blogger Steve Bartin points out. Job growth has been slow, the schools have emptied out as many families have moved to the suburbs. But for those at the apex of society – notably condo developers, well-connected politicos, the cultural elite and a rising African-American upper class – this renewed Chicago represents truly a great city of opportunity.

This shift in identity is quite a change for what was once seen as “the city of big shoulders.” Unlike patrician Boston or mercantile cosmopolitan New York, Chicago can be seen as the quintessential American city – a bit rough at the edges, productive and unpretentious. It emerged the biggest and fastest growing of the Midwestern boomtowns of the late 1800s. A settlement of barely 350 in 1835, it mushroomed to 100,000 at the time of Abraham Lincoln’s election in 1860, and housed over a million forty years later.

Chicago was elemental – its industry bigger, its politicians more corrupt, its criminals seemingly more lethal and better organized. So, too were its business leaders. Chicago, one speculator wrote following the panic of 1837, “resounded with the groans of ruined men and the sobs of defrauded women who entrusted all to greedy speculators.” Undaunted, the city’s elites proved relentless in their ambition, lobbying Washington and Wall Street for dominant position in the burgeoning east-west trade. St. Louis businesspeople, noted the Chicago Tribune in 1868, “wore their pantaloons out sitting and waiting for trade to come to them” while Chicago’s “wore their shoes out running after it.”

Our focus on Chicago shows that this spirit of opportunistic boosterism has not been lost. The excellent piece by Carol Eisenberg on Muckety.com – part of this package – reveals the remarkable unanimity among the city’s business, political and cultural elite under the regime of the second Mayor Richard Daley. The impressive recovery of the city’s central core, and surrounding waves of gentrification, have turned the city into a favorite role model for younger cities from Los Angeles to Miami looking to prove their urban bona fides.

This marks a dramatic change in popular perceptions of Chicago. A Swedish visitor in 1850, described it as “one of the most miserable and ugly cities” in America. Later, it was known as an industrial powerhouse; when Berlin in the early 1870s developed as a major manufacturing center, it was christened “Chicago on the Spree.” Yet by then Chicago was also developing a softer side: it was home to the reform efforts of Jane Addams, whose focus on rough ghetto neighborhoods inspired others around the country. Rebuilding after the devastating fire of 1871, the city also embarked on an ambitious program of civic improvement, constructing over the next three decades a major library system, a new home for the Arts Institute, the Field Columbian Museum and a large expansion of the University of Chicago.

It is this more gilded, elegant Chicago – home of arguably the nation’s and even the world’s greatest collection of 20th Century high-rise structures – that foreshadows the current city. The success of Millennium Park, the powerful if now fading condo boom, the city’s newfound celebratory culture (think Oprah Winfrey and Barack Obama), its growth in fine restaurants, nightclubs and other entertainments has persuaded some observers like the University of Chicago’s Terry Nichols Clark to declare that Chicago is indeed the model city of the future.

Clark’s new urban vision sees a city that marries upper crust with proto-bohemian elements, providing a spectacle for the well-to-do and distracted. Such cities may no longer serve as a vehicle for class mobility, but as an “entertainment machine” for the privileged. For these elite residents, the lures are not economic opportunity, but rather “bicycle paths, beaches and softball fields,” and “up-to-the-date consumption opportunities in the hip restaurants, bars, shops, and boutiques abundant in restructured urban neighborhoods.”

Clark and other observers give much of the credit to the political regime of Mayor Richard J. Daley, under whose auspices Senator Obama has enjoyed his meteoric rise. But this is not a partisan issue. Conservative author Joseph Epstein, a usually restrained observer, also is in the Daley cheering section,

Looking behind this celebratory consensus, long-time Chicago observer Steve Bartin sees a far less pretty picture. Corruption, he notes, has not diminished under the younger Daley – new revelations are certain to tarnish Senator Obama’s clean image. Nor can the economic performance of the city be seen as widely successful as it appears to luxury real estate developers. Jobs have languished, Bartin points out, and many others are threatened by technology and the shift of employment to the suburbs as well as more affordable Sunbelt cities.

Of course, as in other large American cities, Chicago’s real estate market has provided a boon for developers and the high-wage earning elites, including a rising African-American professional class. But many observers, including Bartin, point out that it has not been so good for the poor, who have been often displaced and economically marginalized. At the same time, the middle class, particularly those with children, continue to flee to the suburbs, keeping population growth stagnant or even negative. Roughly half of all white families (as of 2005) leave when their children reach school age.

The editors at Newgeography.com welcome Chicagoans and other observers to post their comments on this collection – or just their comments – to our new site. We invite controversy, but require politeness and respect among combatants.

Joel Kotkin is the Executive Editor of Newgeography.com.

Recently, Crain’s Chicago Business reported on Chicago winning an award from Fast Company magazine. “Chicago stood out in our reporting for its creativity and vitality,” Editor and Managing Director Bob Safian said at a press conference here. “Chicago offers something distinctive.”

Fast Company Magazine is representative of much of the media: not much on hard facts about Chicago. The Windy City has distinctions but not positive ones. Chicago’s retail sales tax is the highest in the nation at 10.25 percent. Unions, high taxes, and political corruption have made Chicago one of the leaders in big city decline.

One of the great modern myths of big city America is that Chicago is some sort of successful town and a role model for others. By any traditional performance standards Chicago has failed. Like many old, big industrial cities, Chicago peaked in the 1950 Census with a population of 3,620,962. In the 1950s over two percent of the entire U.S. population lived within Chicago city limits. Over a half century later, while America’s population doubled, Chicago’s population declined. The 1960, 1970, 1980, and 1990 Census numbers showed Chicago losing population.

Mayor Daley and Chicago residents were quite excited about the 2000 Census showing Chicago gaining over 112,000 people (a growth rate at half the national average for the 1990s). It appears the 1990s were an anomaly for Chicago. Since the year 2000, according to Census estimates, Chicago again continued its population decline with a loss of 63,000 from 2000 to 2006 leaving a total of 2,833,321.

Recently, the Web site Real Clear Politics listed two Chicago area Congressional districts among the country’s ten fastest-shrinking districts, in terms of percentage of population lost between 2000 and 2005. Jan Schakowsky’s district lost 7.9 percent of its population. Congressman Rahm Emanuel’s district lost 5.1 percent.

Though 2000 was a somewhat positive year, that year’s Census numbers mask some rather disturbing trends. The white flight out of Chicago continued with 150,000 non- Hispanic white people leaving Chicago from 1990 to 2,000. African-Americans, for the first time, began leaving Chicago with a net loss of 5,000. The population gain in Chicago during the 1990s was due to Hispanics.

One of the great fables urban lovers of Chicago like to talk about is some comeback of the city. The comeback, according to this urban legend, involves white families staying in Chicago to raise their children. With Chicago’s 150,000 white population decline from 1990 to 2000: Chicago was only 31.3 percent non-Hispanic white.

What is even more pronounced is the lack of white children in the public school system. The entire Chicago Public School System is only 9 percent white. Not a single public high school has a population that is majority white. Not one.

Recently, the stubborn facts of Chicago’s population decline made news. As CBS TV Chicago reported in January of 2008:

Half-empty schools are ‘unacceptable’ because they don’t serve their students or the communities they’re supposed to anchor, Mayor Richard M. Daley said Thursday, setting the stage for the biggest wave of school closings in decades.

Officials contend 147 of 417 neighborhood elementary schools are from half to more than two-thirds empty because enrollment has declined by 41,000 students in the last seven years. A tentative CPS plan calls for up to 50 under-used schools to close, consolidate with other schools or phase out over the next five years.

Most of the underused schools are on the South and West Sides, often where the student population is largely African-American, and in lakefront neighborhoods that include Lincoln Park, Lake View, Uptown and North Center.”

The situation isn’t any better in Chicago’s Catholic School System. The Chicago Tribune reported on February 27, 2007:

Nicholas Wolsonovich, superintendent of schools for the archdiocese, called the exodus from Chicago’s Catholic schools ‘mind-boggling.’ In 1964, he said, some 500 schools were spread across the diocese, with about 366,000 students. Now, the system has 257 schools and fewer than 100,000 students. Over the last decade statewide, the number of Catholic schools has dropped from 592 in 1997 to 510 this year, according to figures released at the conference.

Chicago’s political elite love to give speeches about the importance of public education, but not for their children. Mayor Daley sent his children to private schools. Deborah Lynch, the former head of the Chicago Teacher’s Union, sent her kids to private schools. America’s newest political superstar, Barack Obama, sends his kids to private schools. With the exodus of the rich from Chicago’s public schools, 69 percent of the children in the Chicago Public School system are poor.

The horrible public schools, high taxes, and crime have driven families out of Chicago. The city’s job base cannot compete with anti-union places like Houston and Phoenix.

Chicago used to be the number one convention town in America but Las Vegas and Orlando now lead the pack. Chicago has lost its top spot as busiest airport to Atlanta. Chicago’s high priced unions and restrictive work rules have driven business elsewhere. For decades, Chicago was a major banking center with two major banking headquarters located on LaSalle Street. Continental Bank and First National Bank of Chicago were always among the top ten largest banks for much of the twentieth century.

No longer. Continental was purchased by Bank of America while First National Bank of Chicago was purchased by JP Morgan. Not a single bank in the top 25 largest banks in America is headquartered in Chicago. While Chicago’s financial district declines Charlotte, North Carolina has emerged as a bigger banking town. Charlotte has the headquarters of two of the four largest banks in America: Wachovia and Bank of America.

Other elements of Chicago’s financial district also show major weaknesses. Chicago doesn’t have one major mutual fund company headquarters. Chicago’s mutual fund job base is smaller than Denver, Indianapolis, or Baltimore. Chicago has a few major hedge funds but nothing like New York City or London. Chicago is the futures capital of America with the merger of the Chicago Mercantile Exchange and the Chicago Board of Trade but even here the news isn’t all positive. Computers have shed tens of thousands of jobs in the futures industry. Futures trading floors are headed for extinction within the next three to seven years, eliminating even more jobs.

Chicago’s high tax life style has driven businesses and jobs to the suburbs. Chicago is one ofthe only towns in America with an employee head tax on employment. Companies with over 50 employees must pay $4 a month per employee to the city. Most of the major corporate headquarters in the Chicago area are located in Chicago’s suburbs. Motorola, Walgreens, All State, Kraft, Anixter, Illinois Tool Works, McDonald’s, Alberta-Culver, and Abbott Labs all have their corporate headquarters outside city limits.

Recently, Chicago got its first Wal-Mart. In most places in America, politicians allow consumers to decide whether a business should fail or succeed. In Chicago, with the power of the unions, Chicago’s city council has made it difficult for Wal-Mart to open up any more stores. Chicago’s poor are relegated to paying higher retail prices and have less access to entry-level jobs. The adjacent suburb of Niles has the unusual distinction of being the only town in America (with less than 45,000 people) with two Wal-Marts. One of the Niles Wal-Marts is located right across the street from Chicago.

The largest employer in the city of Chicago is the Federal government. Followed by the City of Chicago Public School system. Other major employers are the city of Chicago, the Chicago Transit Authority, the Cook County government, and the Chicago Park District. These thousands of government workers provide the backbone of the coalition for higher taxes, generous pensions and “political stability”.

Chicago’s political system is inefficient and costly. There are no term limits in Chicago. The Democratic Party has controlled the Mayor’s office since 1931(a big city record). There’s no opposition: Democrat’s control 49 out of 50 seats on the city council. Corruption is everywhere. Barely a month can go by without a major scandal. The FBI has the largest public corruption squad in the United States located in Chicago . Chicago voters don’t seem to care. Those who care about high taxes, good public schools, and low crime are a small minority in Chicago.

In conclusion, Chicago’s long decline continues. In the coming years, public pension commitments will test even the high tax tolerant Chicago residents. Look for low regulation, low tax Houston to overtake Chicago in population in the next eight to 15 years.