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Jewish World Review Sept. 9, 1999 /28 Elul 5759

Eris S. Cohen

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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 effective mayor.

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."

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 their jobs.

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."

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 second-class citizen.

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."

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 steady, renewal.

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."

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 praise.

Eric S. Cohen is assistant editor of the Public Interest. Send your comments to him by clicking here.


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