In this era of budget fights and tepid growth, do the old models for building in the public realm still work? Or does the public-private, entrepreneurial, bootstraps model represented by New York City's High Line represent the most viable way forward?

These are the kinds of questions we must resolve before we can take steps forward in our cities, and panelists at the Hamptons Institute grappled with them on Saturday. Paul Goldberger, Pulitzer Prize-winning architecture critic and writer for Vanity Fair, hosted a panel with Robert Hammond, co-founder and executive director of Friends of the High Line, Leslie Koch, president of The Trust for Governors Island, and Joe Rose, partner of the Georgetown Group and former chairman of the New York City Planning Commission and director of the Department of City Planning under Mayor Rudolph W. Giuliani.

The impediments to the construction of truly public infrastructure in New York mirror those in the rest of the country. Rose pointed to the ongoing contraction in previously inflated industries like financial services as a major drain on tax revenue and to unfunded fiscal obligations such as pensions for retired city workers as the main forces suppressing New York’s capacity to spend on infrastructure. As in the rest of America, revenue is not going to suddenly rebound without major policy changes, and our political leaders are rightly hesitant to renege on pension commitments at a time when trust in government is already at perilous lows.

And yet New York has regenerated so much of its public realm in the last 35 years, an era that began with the city's near-bankruptcy in 1975 and included existential challenges such as 9/11. During this time, New York has rediscovered its waterfront, reimagined Times Square and Columbus Circle as centers of commerce rather than seedy interchanges, and opened Governor’s Island as the city’s playground, to name just a few. The city has proven time and again that you don’t need massive surpluses — or even full control over your own budget — to undertake the kind of projects that keep a place great year after year. The current presidential administration could find inspiration for what is possible by looking to what the city has accomplished in spite of its constraints.

Entrepreneurs like panelist Robert Hammond can serve as inspiration for civic-minded Millennials. He identified a problem in his local community, the impending demolition of the old rail line running through Chelsea, learned about the issue and recruited allies by attending community board meetings, and then launched an innovative effort to save the rail line by transforming it into what we now know as the High Line. Rose opined that the traditional civic preservation groups could never have built the High Line. It took an out-of-the-box thinker and an out-of-the-box strategy to do it. This is the impetus behind programs like the Roosevelt Institute’s Pipeline. Since Millennials don’t have the same civic infrastructure that previous generations did, they have to build it themselves. Bringing together young potential entrepreneurs as Pipeline does is the best hope that the projects like the High Line will not be a flash in the pan, but rather a sustainable urban development strategy.

The High Line offers much to emulate, from its high profile launch to its design as an active space that pushes hordes of both residents and tourists not merely to observe but to interact. It stands out as the kind of innovative thinking and tenacious execution that America’s cities so desperately need. However, Rose argued that truly public works are still essential to solve the 21st century challenges the city faces, like a decaying public transit system. Simply put, no public-private partnership is ever going to build heavy rail in this country.

Panelist Leslie Koch offered hope that publicly funded projects can not only still get done, but be innovative game-changers for life in the city. As recently as 2006, there were only 7,000 people who visited Governor’s Island all year. On Saturday, when the panel began, there were 8,000 on the island. Moderator Paul Goldberger put the success of Governor’s Island in perspective, calling it “the most ambitious piece of pubic realm development that we will see in our lifetimes.” Ms. Koch explained that places like Governor’s Island were more essential than ever in contemporary New York City since the most creative people have been priced out of Manhattan. The city needs to create new places for them to congregate in order to reap the full benefits of having the highest density of creative people in the country.

The panelists discussed the challenges that lie ahead for the city, including the need to sustain immigration rates in order to provide the flows of intellectual and financial capital that are the city’s lifeblood. When asked if big public works could be next for New York, Mr. Rose suggested extending more public transit access to the city’s airports, Ms. Koch argued that maintaining the overall quality of the transit system in relation to other world cities' was essential, and Mr. Hammond suggested expanding bike access throughout the city not only as a transit and environmental strategy, but also to continue to attract the young talent that could sustain the city’s greatness for the next generation.

To get more young people on Capitol Hill we have to prove that government can play a positive role in American life.

A recent survey conducted by Harvard University revealed that while 69 percent of 18-29 year olds believed community service was an honorable thing to do, only 35 percent felt that way about running for office. This has real ramifications for the make-up of our legislatures. A recent article in Salon explained that Congress is getting older not because incumbent members are sticking around longer, but because the age of incoming members is rising.

It is worth considering the impact of having telecommunications and Internet policy drafted by politicians who are still “learning to get online” and leaving foreign policy decisions to people whose views were shaped and developed during the Cold War. Stephen Marche made the case earlier this year that these trends have also led to “thirty years of economic and social policy that has been rigged to serve the comfort and largesse of the old at the expense of the young.” So where are the Millennials who should be beating down the doors to the Capitol?

Some have suggested that the absence of young people in elected office is all about economics. Older Americans have gone from out-earning their younger counterparts by 10 times in the mid-'80s to nearly 50 times in 2008. This migration of wealth from young to old has occurred alongside a dramatic growth in the cost of running a successful campaign, with political spending in House and Senate races increasing eight-fold between 1970 and 2000.

This alone does not seem to explain the systemic aging of our legislatures, however. The technology booms of the '90s and aughts also produced a record number of young millionaires and billionaires. Yet they have chosen to stay out of elected office in far greater numbers than wealthy members of previous generations. Why?

I have a theory. The Millennial generation has come of age in an America influenced by a conservative ideology that changed our views about the role of public and private civil society. Heather McGhee, the Washington Director of Demos, has observed, “[T]he most pernicious effect of the Reagan revolution was to take the horizon of public policy solutions off the table entirely. We know that there are problems, but we no longer imagine that there are public policy solutions to them.” This is a profoundly different vision of American government than that which animated the New Deal and Great Society.

The modern Republican Party’s commitment to shrinking the size and scope of the public sector has led them to shake our confidence in key government institutions. The GOP has been able to convince the public that the government is corrupt and ineffective, in part by making the government corrupt and ineffective. This campaign has disproportionately affected the generation of young people who have been forging their views about politics over the last 15 years. Gallup reports that cynicism and negativity toward the government has been building for over a decade, recently culminating in “record or near-record criticism of Congress, elected officials, government handling of domestic problems, the scope of government power, and government waste of tax dollars.”

This phenomenon parallels another recent trend: the rise of the independent voter. Research has long shown that despite the conventional wisdom, self-identified independents actually behave much more like weak partisans than they do like hyper-informed mavericks. The ranks of these “independents” have grown dramatically over the last 20 years, and much of that growth has been concentrated among young Americans. In 2009, Gallup found “more than one-third of the youngest Americans identify as independents, a percentage that drops steadily as the population ages, reaching a low of around 20% among those 80 years of age and older.”

This is not entirely bad news. Even as they have lost faith in our political parties, young Americans have flocked to other forms of civic engagement. The Corporation for National and Community Service reports that volunteer rates for 16- to 24-year-olds has nearly doubled over the last 20 years. In many ways, volunteerism has become second nature to the Millennial generation, taking the place of more traditional political involvement.

But the challenge remains for those who want to see young Americans in Congress. To reverse these trends, we must actively promote the belief that public policy and institutions of government have a powerful and positive role to play in American life. The graying of the House and Senate shows that allowing conservatives to demean public service, institutionalize gridlock, and breed public cynicism will drive away the young and idealistic. This vacuum hands power over to increasingly older politicians with entrenched views and distinct generational interests that do not represent the largest generation in American history.

Bradley Bosserman is a member of the Roosevelt Institute | Pipeline and a Policy Analyst and Director of the MENA Initiative at NDN and the New Policy Institute. 

Congress image via Shutterstock.

No matter how much elites insist that our unemployment problem is structural, they don't have the data on their side.

David Brooks has the 2012 version of the structural unemployment argument in his editorial today, "The Structural Revolution." Here's rooting for this one, as the previous arguments haven't held up all that well.

The 2010 version of the argument had to do with an increase in JOLTS "job opening" data, data that turned out to be incorrectly estimated by the BLS (as we learned in 2011). The 2011 version focused either on the idea that the unemployed had bifuricated into a normal unemployment market and a long-term, zero-marginal productivity market (it hadn't) or that the "regulatory uncertainty" of the Obama administration was holding back the economy (which, as Larry Mishel found, wasn't backed by the data).

There's been a ton of situations where these structural unemployment arguments came charging down the runway only to hit a cement wall of data. One "oops" moment was Raghuram Rajan citing Erik Hurst in claiming that unemployment would be three points lower if it wasn't for "structural" reasons, and Hurst having to publicly point out his preliminary research said nothing of the sort. Another was Rajan arguing, in June of 2011, against monetary policy. Why? Because "one view is that corporate investment is held back by labor-market rigidities (wages are stubbornly too high)....There is, however, scant evidence that the real problem holding back investment is excessively high wages (many corporations reduced overtime and benefit contributions, and even cut wages during the recession)." Empirically that means that there shouldn't be any bunching of wage changes at the zero mark. Here's what the San Francisco Fed found early this year:

Whoops.

Apparently none of that changed anything for anyone. So what do we have now? I want to address three specific points in Brooks's essay which I think are wrong in a very useful way. First, Brooks argues that "Running up huge deficits without fixing the underlying structure will not restore growth." The argument here is that a larger deficit will not help with short-term growth. I'll outsource this to Josh Bivens, addressing a similar argument from Adam Davidson:

This is the reverse of the truth – there is wide agreement that debt-financed fiscal support in a depressed economy will lower unemployment. Now, it’s true that there are holdouts from this position. And others who think the benefits of lower unemployment are swamped by the downsides of higher public debt (they’re wrong, by the way). But, the agreement is much more widespread – ask literally any economic forecaster, in the public or private sector, that a casual reader of the Financial Times has heard of if, say, the Recovery Act boosted economic growth. They will all tell you “yes.”

You won’t find anywhere near such a consensus on long-run tax or education or health care policy. In fact, public finance economists can’t get unanimous agreement on if, in the long run, income accruing to holders of wealth should be taxed at all (it should, by the way). In short, anybody waiting for the current unpleasantness to pass and for economists to unite in harmony in future policy debates shouldn’t hold their breath...

Lastly, Davidson notes that there is a rump of economists (he calls them, reasonably enough, the Chicago School) that argue that debt-financed fiscal support cannot help economies recover from recessions. But, it’s important to note that there is pretty simple evidence that can be brought to bear on this Keynesian versus Chicago debate. Nobody denies, for example, that the government could borrow money and just hire lots of people – hence creating jobs. What the Chicago school argues is that this borrowing will raise interest rates (new demand for loans will increase their “price,” or interest rates) and this increase in interest rates will dampen private-sector demand. But interest rates have not risen at all since the Recovery Act was passed and private investment has risen, a lot.

Second, Brooks argues that "there are the structural issues surrounding the decline in human capital. The United States, once the world’s educational leader, is falling back in the pack." If this is the case -- that our problems are a lack of education and investment in human capital -- then recent college graduates would have significantly lower unemployment rates than most, or they would be the same, or if they were higher then they'd come down even faster. Also from EPI, Heidi Shierholz, Natalie Sabadish, and Hilary Wething, "The Class of 2012":

Young people with recent college degrees have high unemployment rates. That's not good, either for Brooks's argument or for the huge number of young people being devastated by the weak economy and the weak response of elites.

Third, we have Brooks arguing that there are issues "surrounding globalization and technological change. Hyperefficient globalized companies need fewer workers. As a result, unemployment rises, superstar salaries surge while lower-skilled wages stagnate, the middle gets hollowed out and inequality grows." Some occupations require high skills and have sufficient demand, but some occupations require mid-skills and are disappearing. (Low-skill jobs should be fine on unemployment, but low on wage growth, in most versions of this "job polarization" theory.)

Let's take BLS CPS unemployment data by occupation, March 2007 and March 2012, and see if you can tell me which occupations require these high-end skills from their low 2012 unemployment rates:

I'm having trouble seeing them in the data.

So here's the important thing about the demand-side recessions: If I wanted to come up with a "supply" theory for Brooks, I'd say, looking, at the data above, that we have too many college graduates and too many business and professional workers. I'd also say we have too many non-college graduates and too many service workers. I'd also say we have too many of all ages, all educations, and all occupations. Something is weak at a fundamental level in the economy, which is impacting everything, even before we get to the pressing issues related to job polarization or education. That weakness is demand, and that is where the policy response should be. Don't tackle it, and the longer-term problems are even harder to manage.

As David Beckworth noted, "[t]his evidence in conjunction with that of downward wage rigidity,  excess money demand, and the Fed handling the housing recession just fine for two years should remove any doubt about there an aggregate demand problem. The real debate is how best to respond to this problem." The evidence he referred to was the SF data noted above along with the tracking he found between sales being reported as the "single most important problem" by small businesses and the unemployment rate:

Mike Konczal is a Fellow at the Roosevelt Institute.

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