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Local matters in economic policy.

NLC's Ninth Annual Opinion Survey reports that local elected officials view improved performance in the American economy as greatly important to the nation's cities and towns. In turn, the performance of local economies will be central to President-elect Bill Clinton's ability to, as he says, "grow the American economy again."

In economics and in economic policy, "local" matters very much.

Henry Cisneros, former mayor of San Antonio and Clinton's selection to lead HUD, told the NLC Board of Directors on November 28 that "increasingly there is scholarly work being done that stresses the importance of cities to the economy.'

Some of that research has been sponsored by NLC. The most recent publication, "City Distress, Metropolitan Disparities, and Economic Growth," declares that the U.S. economic system is "an interdependent system" of local economies. The report warns that 'the nation pays a high price for policies that ignore variations' among these local economies.

Four questions shape the policy agenda for .national attention to local economic matters.

1) As Clinton sots up his economic policymaking apparatus, which parts of it will be charged with tracking the performance of local economies and proposing needed policies?

Such analyses" require data and conceptual frameworks far different from the conventional macro-economic focus on national averages or business sector assessments. This task should be a part of the job of the Council of Economic Advisors. Cisnercs' HUD could also have a stake in this, but the HUD Secretary does not seem to be included at the economic policymaking table. Could Labor (with JTPA) or Commerce (EDA and the Bureau of Economic Analysis) carry this agenda?

2) If Clinton proposes a stimulus package, will it include programs that deliver money directly to the local level?

The recommendations made by the NLC Board of Directore at their New Orleans meeting (see The Nation's Cities Weekly, December 7, page 2) take this approach. The Board urged a strategy that would "rely on tried and tested programs and existing delivery systems that can produce the most efficient action and results." This would also allow targeting to areas most affected by the cyclical recession.

3) President-elect Clinton has clearly declared his intention to re-orient federal tax and spending priorities to "investments" that will build for long-term economic viability and competitiveness. Will this investment be focused on building healthy local economies that can grow?

Economic growth occurs where the capacity for growth exists and part of that capacity is public, ranging from transportation and communications systems to education and job training networks. While specialization is important, each local economy needs an adequate base of such capacity. A federal investment policy that looks only at national totals inevitably will have uneven effects among local economies and thus will leave some areas with underused potentials and other areas overburdened by growth.

4) Will the Clinton administration seek ways to enhance local economic policymaking and ways to form partnerships with regions that can establish constructive interlocal economic collaboration?

In the long run-the perspective that Clinton repeatedly urges--exclusively top-down policies will not be effective. Federal leadership is crucial. Local leadership is also crucial, especially in bringing together jurisdictions whose boundaries taken together encompass local economies. The willingness of Clinton and his cabinet team to share economic policymaking with city and town officials will be the only way to build the policy infrastructure necessary to ensure healthy local economies and thus "to grow the American economy."
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Title Annotation:Opinion
Author:Barnes, Bill
Publication:Nation's Cities Weekly
Date:Jan 11, 1993
Previous Article:NLC founder, John Stutz, passes century mark.
Next Article:Economy dominates officials' assessment of local conditions.

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