An Economic Blueprint for Chicago Any Progressive Candidate Should Get Behind
Chicago’s elections offer a chance to break with the neoliberal policies of the past—by taxing the rich to invest in underserved communities.
When Chicago Mayor Richard M. Daley left City Hall in May 2011, he was greeted with banners reading, “Chicago … A World Class City … Thank You Mayor Daley.” Many mayors before him had set out to turn Chicago into a world-class city, and with those banners, the city’s political establishment was proudly proclaiming that Daley had accomplished this feat. When Rahm Emanuel succeeded Daley to the Mayor’s office, he saw it as his mission to maintain this world-class status.
But the vision of a world-class city that Daley and Emanuel have projected through their financial and budget priorities has been deeply incongruent with the needs of Chicago’s communities. Their version of turning Chicago into a “world-class city” typically meant passing policies to attract wealthy, white professionals and big, multinational corporations to the city — at the expense of the city’s communities of color. To these mayors, improving Chicago has included transforming the demographics of the city rather than improving the lives of the people who already live there. The policies embraced by both Daley and Emanuel have systematically pushed Black residents out of Chicago. Meanwhile, a wave of wealthier and whiter residents has ascended upon the city in recent years.
But Chicagoans don’t need elected officials who seek to replace them with people they find more desirable. They need new leaders who will break with the city’s past and reject policies that further enrich billionaires and major corporations. They need a new mayor and City Council that will help transform the city into one that meets the needs of the people who already call Chicago home.
Daley and Emanuel’s Neoliberal Paradise
In his quest to make Chicago “world-class,” Daley tore down public housing complexes — including Cabrini-Green — that had been home to thousands of poor Black families and turned the land over to developers to attract rich, well-educated white people into the city. The neighborhood where Cabrini-Green once stood saw the greatest increase in the concentration of households earning more than $200,000 of any neighborhood in the country between 2000 and 2017.
Daley also used Tax Increment Financing (TIF) schemes to siphon tax dollars away from blighted neighborhoods in order to award hundreds of millions of dollars in tax giveaways to rich corporations and developers. He invested in glitzy downtown projects like Millennium Park, greatly expanded bike lanes, opened new selective enrollment schools on the city’s predominantly white North Side and spent tens of millions on the city’s failed 2016 Olympic bid, all while consistently ignoring the needs of residents on the city’s predominantly Black and Latinx South and West Sides.
Emanuel followed in Daley’s footsteps. He invested in projects that would make Chicago more attractive to wealthier white families and tourists — like the Bloomingdale Trail, Maggie Daley Park and the Riverwalk extension — and turned a blind eye to the city’s Black and Latinx families who were enduring cuts to public services, endemic violence, and rapid gentrification and displacement.
As mayor, Emanuel continued to use TIF funds to take from the poor and give to the rich. He sought to bring both the G8 (unsuccessfully) and NATO summits (successfully) to the city in 2012 as part of maintaining Chicago’s world-class stature. He now wants to build an express train from downtown to O’Hare to make it easier for worldly business travelers to get to their meetings even though Chicago already has a public train line that makes that same trip. He was able to find $2.25 billion in tax handouts to offer to Amazon — the richest company in the world — but relies heavily on regressive fees from red light and speeding cameras in communities of color to fill budget deficits, despite the fact that unpaid traffic tickets are a major cause of bankruptcy for poor Chicago residents, and Black Chicagoans in particular.
Daley and Emanuel’s desire to rebuild Chicago as a haven for wealthy, white people is a symptom of a broader disease pervading Democratically-controlled cities throughout the country: Neoliberalism.
Neoliberalism, which looks to the market to solve social, economic and political problems, has been the prevailing ideology in the United States and much of the world over the past three decades. Neoliberals argue that if we let private sector actors compete in an unregulated marketplace, we will achieve better results than could be attained through government intervention or regulation. As a result, neoliberals generally favor cutting taxes, privatizing public services, deregulating industries and busting unions. In Chicago, this ideology has manifested through privatizing parking meters, tollways and airports, converting unionized public schools into nonunion, privately-run charter schools and overseeing a mayoral-appointed school board packed with corporate executives rather than one elected by voters.
When it comes to municipal politics in the United States, neoliberalism often boils down to decisions about who is worthy of public investment. In an economic system controlled by market competition, it’s presumed that the rich earned their money while the poor didn’t work hard enough, and therefore the rich should be rewarded and the poor should be punished. This helps explain why neoliberals like Daley and Emanuel hand massive tax giveaways to corporations while at the same time raising regressive fines and fees that hit poor people the hardest.
Not coincidentally, in big cities like Chicago, the unworthy poor are overwhelmingly people of color. Neoliberal ideology is undergirded by white supremacy. Neoliberalism’s reliance on competitive markets ensures that there will always be winners and losers. In America, however, the game is rigged to ensure that communities of color will always lose. The legacy of slavery and Jim Crow and the role of white flight and racist redlining have ensured that Black people, in particular, remained poor and were not allowed to build wealth. While dressed in race-neutral language, neoliberal policies are often designed to punish people of color.
A Blueprint for Investing in Chicago’s Future
Neoliberal policies can never produce a truly world-class city, because the world does not need more cities that view the majority of their residents as people who need to be pushed out and replaced. As the Daley-Emanuel era in Chicago comes to a close, it’s important for the city’s newly elected leadership to learn from the failures of the past and commit to policies that will put the interests of Chicago’s current residents first. These policies must be rooted in one fundamental principle: Chicago should be governed for the people who live here.
This can only happen if the city’s elected officials reject the neoliberal paradigm that holds that public policies should reward the rich and punish the poor, and that anything government can do, corporations can do better. To give Chicagoans the world-class city they deserve, here is a menu of policies the city’s new elected leaders should embrace:
Make the wealthy and major corporations pay their fair share to fund quality public services. Chicago can raise more than $3.7 billion in progressive revenue by:
- Levying a city income tax on high-earning residents and commuters
- Imposing a speculation tax on the financial exchanges on LaSalle Street
- Increasing the real estate transfer tax on high-end properties
- Reinstating the corporate use fee for large corporations
- Making the property tax system fairer
- Ending tax handouts to major corporations and developers
That is more than enough money to pay for universal early childhood education, free community college for all, free public transit and a program to alleviate homelessness in Chicago that could reduce the number of homeless residents by 36,000 over ten years.
Target public investment in Black and Latinx communities to let them thrive. This means that:
- The Black and Latinx neighborhoods that have historically been disinvested in and disenfranchised by City Hall must be the first ones to benefit from the expanded public services that new revenue streams can provide
- City officials must divest from policing and incarceration, which currently accounts for nearly 40% of Chicago’s budget, and invest that money into programs that will actually help keep Black and Brown bodies safe
- The new mayor and City Council should institute a vacancy tax on luxury apartment buildings to help keep rents down and fund affordable housing developments on Chicago’s South and West Sides to help keep Black and Latinx families in the city
Increase taxpayer investment in public services and keep them publicly-controlled. Instead of commodifying our public assets — like Chicago’s water, schools and transit systems — and selling them to private investors, we need to fully fund our public services and infrastructure and keep them public.
Establish a public bank and declare our independence from the big banks on Wall Street. A public bank could help Chicago and city agencies (like Chicago Public Schools and the Chicago Transit Authority) save more than a billion dollars a year on financial fees and interest payments by:
- Underwriting municipal bonds for the city and its agencies
- Managing the city’s seven pension funds
- Refinancing the city and its agencies’ debt at significantly lower interest rates
A world-class city is one that takes care of the people who already live there. Chicago’s new mayor and City Council should adopt this new blueprint for progressive economic policies to give Chicagoans the city they deserve.
These recommendations are taken from a report put out by the Action Center on Race and the Economy (ACRE) that you can read in full here.