Thursday, September 25, 2008

About the Troubling Economic Crisis

The events of the past few days have caused me great pause and consternation. Our nation is gripped in a financial crisis that at its worse could send us down a course that would rival the Great Depression.

And yet these days it seems we go from crisis to crisis – a war with no clear result or end, the housing and foreclosure crisis a few months ago, now we have a melt down on Wall Street.

Congress considers passing a plan to bail out an industry that should know better, an industry Congress had coddled, and will now subsidize.

Congress will then move on to the next debate – all without addressing the underlying conditions that got us here, and keep getting us here.

Why are markets failing? Why are the fundamentals of our economy not sound? Why do people feel worse today, and are more pessimistic about our future than at any other time in our history?

This is a time when Washington has lost its values----- lost its principles - lost its sense of purpose - It no longer invests in our cities, it no longer invests in our people.

Plain and simple, Washington has abandoned us.

Cuts to education, cuts to housing, health, public safety, youth programs, economic development, job training, arts, and infrastructure.

This comes at a time when people in America are suffering – when our nation needs the most.

Consider the following:

1 in every 6 children lives in poverty, with nearly half living in extreme poverty. Is poverty and economic opportunity an urban problem or an American problem?

The US economy has lost over 450,000 jobs so far this year - wages remain flat - gasoline is now over $4 a gallon - rising food prices, rising medical costs - hitting each and every one of us in the wallet.

Is our economy an urban problem or is it an American problem?

We know the answer - these are America’s problems – and yet cities have been left alone to deal with them.

Cities drive the national economy. And yet, when Mayors bring up the issues we all face – we get the same response.

We are told Mayors need to be fiscally responsible, that we need to do more with less, but there is not enough money to solve urban problems.

CDBG is funded at a little over 3.5 billion annually, and has been cut every year since I’ve been in office – We get a Water Bill passed over a veto, approximately $5 billion annually – this is what we spend on water! And remember the SCHIP crisis? How much resistance did the current administration put up to spending money to make sure uninsured children got health insurance?

And yet, this same administration proposes we spend $700 Billion to bail out Wall Street. We are supposed to entrust the bailout to the same regulators who allowed it to happen.

This isn’t monopoly money – Can any of you imagine what $700 billion dollars could do in America’s cities? Or even $350 billion?

Then we are told we MUST spend this money to save our economy, save our very way of life, but no one talks about the path that led us here. The financial crisis has been building up for some time – we know about the bad lending practices; irresponsible borrowing; irresponsible lending - No one bothered to look at underlying value until it was too late.

Meanwhile, mayors have been working on financial literacy, small business assistance, entrepreneurship, education – working with organizations like the ICIC to reinvigorate our inner cities –

We are arming people with the knowledge and tools necessary to make wise financial choices, to build credit worthiness, to accumulate wealth. And now the financial crisis may lead to a credit crisis – Whereas banks were too eager to lend, now they don’t lend at all.

It is time for Washington to end its partisan gridlock, end the pointless debates, and engage in some serious planning and leadership to address the issues we all face.

I’ve spent the last 2 months travelling throughout the nation as part of our Mayor’s March Across America – these are 5 cities, 5 forums.

They deal with crime and public safety to make our streets and neighborhoods safe for children and families. Poverty reduction and economic opportunity so that we can financially empower all Americans. Arts, culture, and tourism - stimulating an industry that creates jobs that cannot be outsourced - a generator of over 10 million jobs and $1 trillion in economic impact. Infrastructure investment - to repair and rebuild our nation’s resources, with every billion invested generating over 47,000 jobs that cannot be outsourced.

And our environment - again generating millions of jobs that cannot be outsourced, preserving our nation and planet for generations to come.

These forums will form the basis for what we will present to the next president as his urban agenda for the first 100 days.

The next president must understand that an investment in America’s cities, an investment in America’s people is an investment in America’s future.