Jewish World Review Sept. 9, 1999 /28 Elul 5759
Eris S. Cohen
Goldsmith's Secrets of Success
ASKED FOR A DEFINITION of compassionate conservatism at a recent luncheon in
Washington, Stephen Goldsmith didn't miss a beat:"To me it means that
Republicans have an obligation to help those who are in difficult straits,
and that we can do that and still be conservative at the same time."He
should know. Goldsmith, the two-term mayor of Indianapolis, is presidential
candidate George W. Bush's guru of urban renewal.
Goldsmith's record in Indianapolis is impressive: Since coming to office in
1992, he has cut the budget every year, cut taxes four times, opened up over
80 city services to competitive bidding, and reduced the city workforce
(everybody but police officers and fire fighters) by 40 percent. Crime is
down, record numbers of new homes are going up, and unemployment is below 3
percent. The lessons of Goldsmith's success offer a model of urban reform
across the country. Call them the seven habits‹or strategies‹of a highly
HABIT 1: ENCOURAGE COMPETITION
Markets do many things. They inspire creativity, tailor services to public
demand, and weed out bad assumptions. Government monopolies, on the other
hand, are fat and inefficient. It's not that city workers are inherently
lazy; they just lack the freedom, incentive, and expertise to improve
services and cut costs.
Like the prospect of hanging, Goldsmith says, competition concentrates the
mind wonderfully. Yet,"the crucial factor in a free market is not fear but
freedom."Markets empower workers, who"are more than willing to answer for
their results in exchange for real authority over how their jobs are done."
In Indianapolis, Goldsmith made it clear that workers who reject
accountability, who want to be coddled and protected, should do so on their
own time and not at taxpayers' expense.
To the mayor's surprise, union workers, freed from unnecessary middle
managers and allowed to bid against private companies, openly won a fair
number of city contracts. The city soon contracted out many services,
including wastewater management, towing abandoned vehicles, and running the
Indianapolis airport. The total savings: $400 million. Moreover, Goldsmith
was proved correct. The new services are, as he likes to say,"not just
cheaper, but better."
HABIT 2: FIRE YOUR FRIENDS
City governments are notorious for the well-connected party hacks who get
appointed as"supervisors"throughout the bureaucracy. Goldsmith fired
enough of them to make city departments competitive with private sector
companies. It was not an easy task‹the managers he fired were predominantly
his own Republican supporters‹but it paid off. Goldsmith cut a number of
needless positions, saved the city money, and won the respect of the union
workers, who at first viewed his"marketization"plan as merely a threat to
HABIT 3: CUT TAXES
Just a few years ago, both big government liberals and budget hawks
dismissed the importance of marginal tax rates as"voodoo economics."Today,
big city mayors, both Republicans and Democrats, believe that supply-side
tax cuts are not just common sense but economic necessity."Let me be
absolutely clear about this,"says Mayor Ed Rendell, the Democratic mayor of
Philadelphia."Tax reductions are one of the highest priorities of my second
term. If we are to have any chance of permanently reversing the decades-long
trend of losing residents and businesses, we have to continue to . . . cut
the tax burden that chokes our residents, our workers, and our businesses."
HABIT 4: DO THE FUNDAMENTALS
A basic failure of the liberal vision of government is that it is long on
the things communities should do and short on the things government should
do. Fundamental problems like bad roads, syringes on the playground, and
backed-up sewers go unaddressed while city governments roll out one
³personal well-being program"after another. In the end, dilapidated public
spaces send a signal that if you live in a tough neighborhood, you're a
Under Goldsmith, the city government has been focused on fundamentals. Seven
poor areas have been targeted through an initiative called Building Better
Neighborhoods. In all, more than $1 billion has been invested to rebuild
sidewalks, resurface streets, and build and restore parks and public
buildings. Law enforcement spending has been increased by $160 million; 178
sheriff's deputies, police officers, and park rangers have been added. And
yet, Indianapolis has seen four tax cuts over the same period.
This approach has reaped many rewards. When Goldsmith visited poor
neighborhoods at the beginning of his first term, residents shouted at him.
Thirty years of big-government programs and city planners had turned the
underclass into hardened cynics. At a neighborhood meeting, one man"stood
up and stated flatly that the city had ignored [them] for too long"
Goldsmith recounts."ŒFace up to your responsibilities,' he said, Œand then
we will respond."
HABIT 5: SUPPORT LITTLE PLATOONS
The man who stood up at the meeting was a former Black Panther named Olgen
Williams. He has since become one of Goldsmith's biggest supporters and a
very effective community leader. At the Christamore House, a community
center in Haughville, one of Indianapolis's toughest areas, Williams serves
as director, mentor, counselor, and fix-it man.
Williams lives in Haughville. The father of ten, he has a personal stake in
the community. Moreover, he knows the hard-luck stories of the people around
him. His involvement with the children who come to Christamore House has a
distinct civic importance. Their lives shaped by gangs, crack, and above
all, poverty, the youngsters are nevertheless neatly dressed and
well-mannered. They even show a polite interest in me, a white guy in a
suit, and ask what I do for a living. They are developing good habits, the
foundation of any just and prosperous regime.
City hall has supported the"little platoons" in Indianapolis with a series
of civic initiatives. Community policing, an idea developed by Mark Moore
and George Kelling at Harvard and James Q. Wilson at UCLA, has transformed
the formerly antagonistic relationship between Indianapolis police and the
urban poor into a constructive partnership. In addition, Goldsmith has
turned around public housing by moving public money into private investment
and working with various community development corporations.
As a result, crime is down dramatically (except for homicides, which
Goldsmith attributes to the late introduction of crack into Indianapolis).
Over 4,000 homes have been built or restored in the city's most broken-down
neighborhoods. And despite the many social and economic ills that still
confront the city's poorest residents‹out-of-wedlock births, crack, poor
schools‹there is a new optimism that springs from seven years of slow, but
HABIT 6: BRING G-D BACK TO THE GHETTO
Recently, Texas governor George W. Bush traveled to Indianapolis to make his
first major policy address."In every instance where my administration sees
a responsibility to help people,"he said,"we will look first to
faith-based organizations, charities, and community groups that have shown
their ability to save and change lives."Bush is not alone. Americans have
lost confidence in government's ability to do what religious and community
institutions always did‹help the disadvantaged‹and, as a result, many
politicians have embraced the solutions offered by institutions of faith.
Goldsmith has been leading the way. The Front Porch Alliance has placed the
resources of city hall behind faith- and community-based efforts to rebuild
the city's social capital. The program has helped churches turn abandoned
parking lots and crack alleys into parks and playgrounds. It has supplied
community groups with city trucks and dumpsters for neighborhood cleanup
projects. It has linked faith-based organizations with local charities and
businesses to fund after-school, job-training, and family-outreach programs.
As Goldsmith explains,"We listen to community and church leaders, who tell
us what they need. And we try to get it for them‹with private resources if
possible, and public resources where appropriate."
HABIT 7: KEEP GOVERNMENT HUMBLE
Mayors across the country are abandoning the Great Society philosophy of
government-knows-best in favor of pragmatic, neighborhood-based, faith-based
approaches to urban renewal. Goldsmith has shown that a humble government is
not a limp government, just one that focuses on its core responsibilities
and knows its limits. Businesses are better at providing jobs and creating
wealth. Churches and families are better at maintaining the social fabric
and instilling virtue. Private companies are often better at providing
essential public services.
A humble government accepts its role as a support player. It takes its
signals from neighborhood leaders and entrepreneurs. Where appropriate, it
supplies limited resources; a humble government does not see in every
problem the beginnings of a new agency or government mandate. Those mayors,
Republicans and Democrats, who have followed Goldsmith's example‹cutting
government and taxes while encouraging competition and community‹are being
rewarded with popularity, electoral success, and national
Eric S. Cohen is assistant editor of the Public Interest. Send your comments to him by clicking here.
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