There Is Nothing for You Here, page 43
In November 2020, a group of eight mayors from Pennsylvania, Ohio, West Virginia, and Kentucky—in the Appalachian region of the greater Ohio River Valley—called for a “Marshall Plan for Middle America,” a variant of the Marshall Plan, or European recovery program, that the U.S. initiated in Europe after World War II. They noted that the plan’s architect, U.S. secretary of state George C. Marshall, had been born in Uniontown, Pennsylvania, and they advocated for a similarly large-scale, multiyear, regionally focused federal program for that region and others like it in the United States.
The original Marshall Plan was conceived as an investment in postwar Europe’s financial stability and its political future, and it helped forge a transatlantic alliance system that lasted for the next eight decades. The plan was a response to the physical and economic devastation of Europe after years of heavy combat during World War II. Much of Europe’s infrastructure had to be rebuilt—entire cities, roads and rail connections, power plants, and industries. The U.S. feared that the destruction and dislocation of the war, with millions of refugees, mass unemployment, and poverty, would undermine European democracies and increase the appeal of Communist and other extremist parties across the continent. Faced with that prospect, over a relatively short time, from 1948 to 1951, the United States dispensed more than $13 billion in grants and loans.
The original Marshall Plan does offer a useful overarching frame for the United States at a critical time in the country’s history. But it was a one-time injection of money, not a sustained long-term development effort. The focus was primarily on relief and recovery. Under the Marshall Plan, individual European countries drew on central resources to kick-start their own investment strategies. Local leadership and public-private efforts continued projects beyond the scope of the plan.
The longer-term development goals were later picked up on a permanent basis by the International Bank for Reconstruction and Development—the World Bank—which established specific in-country programs that eventually expanded from Europe to the rest of the world. Similarly, after the Cold War, the U.S. helped with the creation of the European Bank for Reconstruction and Development (EBRD) for the redevelopment of the former Soviet Union and Eastern Europe. The Washington, D.C.–based Eurasia Foundation, where I worked in the late 1990s, was set up by funding allocated by the U.S. Congress to complement EBRD and other programs by taking grant-making down to the grassroots level in the former Soviet republics. Funding had to be aligned with local needs. Community groups came up with their own development strategies and proposals.
The whole point of U.S.-led international development programs was to invest directly in people, their communities, institutions, and private businesses so they could strengthen their own capacity for action. We need to do the same for the United States, so that Americans can access and create the infrastructure of opportunity for themselves.
In early 2021, building on these kinds of global development initiatives and the idea of the mayors from Appalachian cities, Tony Pipa at the Brookings Institution issued a report recommending the creation of a “domestic development corporation” specifically designed for rural America. Rural America accounts for 14 percent of the U.S. population, or forty-six million people who live outside large metropolitan areas and their suburbs. Since 2005 rural America has fallen through the gaps in every U.S. government program, hemorrhaging vital services, including access to health care, which put its population in a precarious situation ahead of the pandemic. In a ten-year period, for example, 176 rural hospitals and associated medical centers closed, forcing residents to drive long distances, sometimes for hours, even for emergency treatment.
As in the case of similar proposals, Tony recommended pulling together and streamlining existing funds and setting clear development goals. His report pointed out that millions of dollars of funding were already being dispensed but were buried across four hundred federal programs, thirteen departments, and ten independent agencies as well as over fifty offices and subagencies. No fewer than fourteen congressional committees had some form of responsibility for legislation concerning rural-eligible programs. The obvious solution was a single national program for rural America that could be part of a larger federal development agency or effort.
The original Marshall Plan was a huge transfer of funds to modernize industry, restore infrastructure, break trade barriers, and head off communism. Today America needs something broader—an intervention at all levels that is more than just an injection of money or a one-off series of capital investments in roads and railways. The Marshall Plan was also a government-to-government program. In the United States, the government is no longer the primary mover, and private actors play critical roles in providing place-based programs and services. The key is to empower them to take development into their own hands, making it a virtuous cycle to counteract the vicious cycles that have dominated in America’s forgotten places for so long.
Aiding Outside the Box
Once national and regional frameworks are in place and targeted development programs are under way, individuals and private groups can step in to bolster the infrastructure of opportunity. This is what happened in the former Soviet Union, for example, in the 1990s and early 2000s. And the same approach could easily be adapted and applied in the United States in the 2020s.
In the former USSR, international organizations like the World Bank and American and European government development agencies provided large-scale funding for major programs. Independent organizations such as the Eurasia Foundation focused on supporting grassroots organizations at the local level by disbursing small grants and promoting collaboration among them. With its own government funding and contacts with the U.S. State Department, Congress, the U.S. Agency for International Development and similar European entities, the Eurasia Foundation played a critical networking and coordinating role. It helped to connect governmental agencies to nonprofits on the ground in specific countries. And it created linkages among the local and community-level organizations to encourage relationship-building for initiatives, such as developing regional educational and employment programs for people with disabilities or creating trading networks for small-scale agricultural and food producers.
The Eurasia Foundation and similar independent entities became clearinghouses and conveners, as well as training providers and advisers for grantees on how to use technology, measure the performance of their programs, and make sure funds were spent properly. They helped to create information systems for their grassroots grantees to encourage and support research and development initiatives, and they provided platforms to share best practices.
None of these services were time- or country-specific. Because of that, the post-Soviet programs of organizations such as the World Bank and the Eurasia Foundation can serve as a model, a template, for organizations in other struggling countries to follow. Indeed, the Eurasia Foundation is still in operation and has expanded its work to the Middle East and Afghanistan.
Foundations and individual philanthropists can also play a critical role in scaling up in the United States once there is a shared vision and broader context for action. America has long been a world leader in individual philanthropy. In December 2020, for example, MacKenzie Scott, the former wife of Amazon founder Jeff Bezos, donated more than $4 billion to a wide range of long-established but underresourced entities in direct response to the ravages of the coronavirus pandemic. These included historically Black universities and colleges and nonprofits with programs targeted at working-class Americans, alleviating economic hardship and promoting upward mobility. Ms. Scott’s focus was on “no strings attached” philanthropy. Although she and others acknowledged that her donations could not substitute for government funding, they would make a significant difference. In most cases her gifts were the largest donations a group had ever received.
Ms. Scott’s actions were a far more sophisticated and well-resourced version of the kind of individual, scattershot philanthropy usually seen in County Durham and U.S. rural areas. In Blackhall Colliery, for example, a particularly impoverished former pit village on the County Durham coast, not far from Bishop Auckland, two anonymous benefactors literally dropped packets of money in the street over a six-year period. They wanted to help local people in the wake of the Great Recession, but no institution was available to pass money through to the community. They took the risk that whoever found the money would figure out something beneficial to do with it.
In Bishop Auckland, a school friend, Aidan Davison, who went off to play soccer in the Premier League, tried to play the same kind of Good Samaritan role in Close House, one of the poorest parts of the area, where his grandparents had raised him in a council house. Affordable decent rental housing was still practically nonexistent, so Aidan bought several abandoned rowhouses and renovated them, hoping to achieve sufficient scale that everything would eventually pay for itself. Without a larger housing program or developmental framework to slot into, Aidan’s venture proved too difficult to manage solo from a distance. Many of the properties ended up vandalized. He couldn’t keep up with repairs. As he told me later, he “lost his shirt.” Aidan would have benefited from a larger initiative through which he and others with similar goals could pool philanthropic monies to create a local asset-based housing fund and pay for a small staff or attract volunteers to manage the project.
In 2020, several initiatives tried to address this same problem for place-based projects in the United States. One think-tank report promoted the idea of the federal government creating a national service-year program and “scholarships for service” as part of a domestic version of the Peace Corps. Recent college graduates would enroll for one to two years of paid voluntary service and be placed within distressed communities across the United States. They would be matched up with local development projects, nonprofits, charities, and schools. The federal government would also forgive student loans for the period of service. The National Commission on Military, National, and Public Service, which was set up in 2017, proposed a similar idea in its final report in 2020. The commission advocated legislation to secure funding for national service and volunteering on a large scale that would enable young people and skilled adults to build new networks and help achieve sustainability for local institutions in every U.S. state.
Building on Local Assets
In this spirit, many towns and cities in America have established local development corporations to promote public-private collaborations and build on existing assets. Some of these have been quite successful in creating new jobs and economic opportunity.
My former Brookings colleague Tesia Mamassian works as the vice president of operations of the Detroit Regional Partnership (DRP) in Michigan, a regional economic development nonprofit serving the eleven counties around the city of Detroit and their 5.4 million residents. The DRP covers a diverse collection of communities and industrial and technology centers spread over a large area. It coordinates with Michigan’s state and local governments to attract new business and investment to the region and produces reports on improving the business climate, as well as informing programs on workforce development. The DRP helps big companies in the Detroit region, such as the Ford Motor Company and General Motors, connect with smaller firms in the new automotive and “mobility technology” sector (self-driving cars and electric vehicles) to create a business network focused on developing technology clusters. In 2020 alone the DRP’s model of bringing together private companies and local government officials brought over $450 million in new investment into the Detroit region and created 1,745 new jobs.
In the Lehigh Valley, where Dad might have ended up back in the 1960s had he actually emigrated, the city of Bethlehem set up a similar public-private partnership, the Lehigh Valley Economic Development Corporation. In the period from 2015 to 2020, the corporation created twenty-six thousand jobs by working with local universities and community colleges, building office parks, and offering tax credits to bring in new companies.
Across the United Kingdom and the United States since the 1990s, state and local governments have often tried to attract new businesses through similar methods, and by deploying tax breaks and other subsidies. If these inducements worked, old industrial towns in the UK might get a megastore such as an Asda. Those in the U.S. might get a Walmart (Asda’s parent company). They might get a meatpacking plant, or a big warehouse and shipping center for Amazon or another multinational company. In some places the tax breaks would bring a series of small factories—Black & Decker, Hitachi, and others came to the Bishop Auckland area. Generous subsidies might attract a car assembly line (Nissan came to Sunderland).
But the new jobs and revenues that these subsidies generated for the local economy were never on the same scale as the old mass manufacturing industries, and sometimes they were temporary. Salaries and workers’ benefits were far less than they had been before as well. This predicament gave rise to some unfortunate developments. In some towns the government, or a private company, might decide to take advantage of the cheaper local labor market and the eagerness of the regional authorities to provide incentives to build a maximum-security prison. This was more secure as a source of jobs (in every sense) than the megastores, warehouses, and new factories. Once a prison was built, it stayed put.
But in other cases, as soon as the government tax breaks and subsidies ended, commercial businesses would take off for somewhere with even cheaper wages and more inducements. I have friends and family in Bishop Auckland and the North East who repeatedly lost good jobs after a few years and had to start again under these circumstances.
The problem is that tax breaks and subsidies as well as stand-alone economic development corporations don’t work particularly well in small towns without existing industrial clusters. Nor do they work in places with few large private businesses to provide matching dollars for external funds and for outmoded infrastructure.
In the 1990s and early 2000s, Bishop Auckland’s immediate district in County Durham attempted to create a local development agency along the same lines as those in Detroit and Bethlehem, pulling together a group of small towns and villages under the rubric “Wear Valley.” It had little success, and Wear Valley was disbanded, although of course none of the towns and villages went anywhere. They didn’t disappear; they simply didn’t develop, and thus continued to decay. Across the North East of England after 1981, there were more than fifty similar failed structures and attempts to spur local growth.
Point A to Point B
Old industrial towns like Bishop Auckland and its counterparts in rural America are poorly connected in terms of their physical infrastructure and also their business and national relationships. The paucity of physical connectivity holds them back, much like people when they are contact- and network-poor. In places like County Durham or its correlate of Carbon County in Pennsylvania, everything used to serve the old central coal mine or factory or link to a larger regional hub. Smaller places were often cut off from each other. Not having a car was a big problem when the rail and bus routes were cut back and jobs moved somewhere that was no longer close to home.
Fifteen miles away from where I live in Maryland is the historic Black community of Tobytown, which is adjacent to one of the region’s most affluent suburbs, Potomac. Few of Tobytown’s residents have cars. Tobytown has no nearby bus stop or bus route into town. To get to the nearest stop on the regional Metro line (close to my house) requires first a trek to find a bus stop and route and then multiple changes. Factoring in all the stops, getting to the Metro on the bus would take about an hour and half, if you were lucky. Your alternative would be a cycle ride along busy roads or a four-and-a-half-hour walk. Unemployment in the community is persistently high. People have homes but no way of getting to a job in a reasonable period, even if they work in one of the limited number of positions in a grocery store in Potomac, about five and a half miles away. Again, there is no direct bus.
Various attempts to set up something for the community have faltered, in large part because there is no broader sustained local demand for buses. The far more affluent residents of Potomac all have their own cars. Anything to serve Tobytown would have to be on a small scale, specifically targeted for a few individuals. So who would pay to maintain a micro transportation route indefinitely?
When I was growing up, I was in the same predicament as the residents of Tobytown. One of the biggest obstacles to my family’s opportunity was distance. Navigating the eight miles from Granny and Grandad’s house in Roddymoor to home in Bishop Auckland was daunting without a car when all the bus routes were cut back. Similarly, throughout the UK, most of the country’s transportation development was focused on increasing linkages to London or other big cities with large populations, like Birmingham, Manchester, and Newcastle. The rest of the country was poorly served by road and rail services. Everything in terms of dense infrastructure networks in the UK seemed to be concentrated in a triangle in the South connecting Oxford-Cambridge-London.
The dynamic is the same today in individual U.S. states, including in regions where the distances are far greater than from Tobytown to Potomac and to Washington, D.C. Poor areas in the United States become even poorer when people have no bus or commuter train service to get to a job and can’t afford a car, even though there may be ample jobs nearby in more affluent communities. Infrastructure improvements, for basic transportation to get to work and Wi-Fi to enable people to work from home without climbing to the top of a compost heap or a birch tree, have to be developed with federal grants and low-interest community loans.
