CHAPTER 7

“Polishing the Apple While the Core Rots”: Carter and the Cities

“Is Baltimore trying to kid someone?” asked the editors of the Afro-American in early 1977. The Commission on Governmental Efficiency and Economy, a division of the city’s Chamber of Commerce, had recently authored a study comparing Baltimore to ten other municipalities. Charm City ranked first, the study’s authors reported with enthusiasm, in “financial standing.” Mayor William Donald Schaefer’s commitment to austerity and to making the city attractive to investors was working. But the Afro-American editors were more concerned about the city’s ranking on other indicators. In the category of “social health,” Baltimore had come in ninth. And it ranked tenth in “educational level per capita.” So what was there to celebrate, the editors wondered? The city’s business climate was important but hardly more so than the well-being of the population. “Baltimore officials go on building monuments to our shortsightedness and gambling away the welfare and best interest of city residents,” the editors protested. Municipal officials did not have their priorities straight. It was time to stop “polishing the outside of the apple while the core rots,” the editors charged.¹

As Baltimore’s Black leaders had been arguing for decades, access to better jobs was key to improving conditions in the city’s core. And given the success African Americans had had opening the public sector to Black workers and the importance of that sector to African American communities, the Afro’s editors wanted to build on the record. Black workers already filled many of the city’s lowest-paid positions; they needed more of the better jobs. And it just did not make sense that white suburbanites held so many high-paying posts. The Baltimore Civil Service needed to limit municipal employment to city residents, the editors argued. Philadelphia and Chicago already had residency requirements for municipal employment, and the policy had withstood scrutiny by the courts on the grounds that locals have a vested interest in the quality of their public services. With both jobs and better services at stake, the editors were frustrated that Baltimore voters had recently rejected a residency-requirement proposal—and angered that election officials had buried the measure deep in a lengthy ballot where only the most diligent and persistent were likely to find it. Without the requirement, taxpayers in Baltimore continued to play “Santa Claus to the wealthier suburbs” and their mostly white residents, the editors argued.² And city dwellers who actually lived in Baltimore’s core had to compete for jobs with those who elected not to make Baltimore their home.

During the mid-1970s, as mounting inflation and unemployment eroded national economic conditions—and Baltimore officials continued to pursue economic “health” by practicing austerity and sacrificing the actual health of residents—fights over public-sector employment remained highly politicized. The residency requirement was but one front in an ongoing battle over the racial makeup of the municipal workforce and its leadership. In the deindustrializing city, public-sector jobs provided a critical source of stable employment. They had also become a bedrock of the city’s Black middle and working classes. Meanwhile, many African Americans remained skeptical that whites would provide Black communities with high-quality services. Black representation in the municipal workforce, particularly in leadership roles, was required to ensure that Black concerns were addressed and that African Americans were involved in decision-making. Although they had been largely overlooked during previous battles over municipal employment, women, both Black and white, also began demanding greater representation in positions of authority. In addition, they pressed both the city and their unions for changes to hiring and other employment practices that perpetuated their disadvantage in the municipal bureaucracy and led to earnings that significantly trailed men’s. The fights were about fairness, and they were also critical to the economic well-being of the city’s Black communities, which relied heavily on women’s public-sector incomes and were thus especially hard hit by gender bias.

Shrinking budgets hindered efforts to further diversify the municipal workforce, improve the terms and conditions of government employment, and use the state to combat pressing urban problems. And although many in Baltimore had hoped that Democrat Jimmy Carter’s election to the presidency in 1976 would be a source of relief, they were sorely disappointed. Flummoxed by the perplexing challenge of the nation’s economic woes when he entered office, the president’s faith in the power of the government to solve problems deteriorated during his term. Ultimately, he turned to conservative remedies to combat inflation, even though he was aware they would worsen unemployment. In so doing, as historian Judith Stein has argued, he lent the weight of the federal government to advancing the economic interests of the nation’s financial sector, which produced wealth but not a lot of jobs, at the expense of the industrial sector, which produced both goods and jobs.³ Carter’s policies increased hardship in the nation’s struggling cities and contributed to shaping the neoliberal global world order that Nixon had started to build. At the same time, the increasingly conservative steps Carter took to fight economic problems limited the domestic policies he could pursue to address poverty and other urban ills. The approach Carter’s administration ultimately adopted to stem decline in distressed cities—the funding of public-private partnerships—enhanced the power in municipal affairs of the advocates of trickle-down commercial revitalization efforts. National labor and civil rights leaders proposed liberal alternatives to Carter’s conservative policies to limited avail. The federal policy changes were blows to workers in Baltimore’s antipoverty and humanservices agencies whose increased influence in the city government during the 1960s had given them the opportunity to shift the municipal agenda away from a myopic focus on commercial revitalization and toward what they called human renewal. During the Carter years, the workers and their unions lost ground in their efforts to ensure that city officials remain responsive to the pressing needs of residents with low incomes.

“A Greater Mix in People Who Make Decisions”: Affirmative Action in Baltimore

During the early 1970s, Richard Nixon’s New Federalism had been an intentional revocation of the independence and influence of activist antipoverty workers and human-services providers in the nation’s struggling cities. By concentrating considerable control over federal resources in the hands of elected officials, the Republican president had diluted the power of African Americans and women in the municipal government. The change hardly stopped Black leaders from demanding top municipal jobs for African Americans. Administrative positions remained a critical source of influence over local policy-making in a city in which Black residents continued to be under-represented in elected offices. During the second half of the 1970s, African American leaders continued to diligently monitor municipal hiring practices and repeatedly pressed Schaefer to appoint Black candidates to top positions. They wanted to maintain African Americans’ influence over antipoverty and human-services agencies, but they also sought leadership posts in more powerful divisions of the government, such as the Department of Finance. On both fronts, they met with frustration.

In 1976, Maude Harvey announced her retirement. James Chavis, a Black assistant professor at the University of Maryland’s School of Social Work and Community Planning, was one of three finalists for the position. Chavis had many years of service with the DSS and had earlier worked for the city’s Community Action Agency and had been the director of the Neighborhood Youth Corps. Ultimately, however, Schaefer selected another finalist, Kalman “Buzzy” Hettleman, for the job. Hettleman was a lawyer whose experience included a stint with the national Office of Economic Opportunity’s Legal Services division and several years as the director of the Consumer Law Center of Baltimore’s Legal Aid Bureau.⁴ Although no stranger to issues concerning poverty, Hettleman was a white candidate and, according to the Afro-American, a “Schaefer pal” who owed no allegiance to Black communities. The paper’s editors complained that the appointment reflected the city’s “white buddy buddy arrangement,” which continuously impeded Black advancement.⁵

Less than two months later, Black leaders had further cause for anger. Baltimore’s white finance director, Charles Benton, had two open positions in his department. The Department of Finance wielded considerable authority over the important task of budget-making and was also, in the words of the editors of the Afro-American, “one of the more lily-white sections” of the city government. The city’s Metro Democratic Organization, an influential Black-run political club, had recently and publicly appealed to the mayor for more powerful spots for African Americans in the city government. At least one position in the Department of Finance would indicate that the white power structure of Baltimore took Black people seriously. Nevertheless, Benton filled both positions with whites. The Afro-American editors called the move a “face slap,” and Raymond V. Haysbert, of the Metro Democratic Organization observed about the mayor, “It seems that he simply doesn’t have any respect for us.”⁶ African Americans in Baltimore certainly did not hold uniform views on public policy or financial matters, nor did Black city residents expect that any single African American could represent all Black perspectives. Nevertheless, African Americans wanted to see individuals with a level of awareness of and accountability to Black communities in positions of authority. They wanted Black people to play a meaningful role in municipal decision-making. Schaefer and his senior staff appeared indifferent to their concerns.

The pressure that African Americans applied on the mayor was somewhat effective, however. In 1976, following years of pressure, Schaefer finally adopted an affirmative action plan for the city. Shortly thereafter, he also selected a new personnel director who was actually likely to implement it. The hire was a victory for the city’s Black leaders and also for women, both Black and white, who had begun to protest more forcefully their own exclusion from influential positions and the discrimination they faced in the municipal bureaucracy. Schaefer chose Hilda Ford, an African American New Yorker, to run the city’s personnel department. During the War on Poverty and while she was in New York, Ford had run the nation’s largest Youth Opportunity Center. She had also overseen the community involvement efforts undertaken by the New York State Employment Service and worked as the assistant director of the Career Opportunities Division in the civil service department. In other words, she was precisely the kind of candidate Black and feminist leaders wanted at the helm of Baltimore’s civil service department, a body that civil rights leaders had been criticizing as racist for decades.⁷ Ford would not have authority over the municipal budget, but she could make improvements to the city’s employment practices.

Ford’s hire drew criticism from some white city officials. Hyman Pressman, the comptroller, complained that Ford was not a city native. But while African American leaders tended to favor a residency requirement for municipal employees, they were more than prepared to make an exception in Ford’s case. As Verda F. Welcome, an African American state senator, explained to Pressman in a letter that was published in the Afro-American, “Instead of deploring this choice of a qualified woman because she gained her experience elsewhere, perhaps you should deplore the fact that Baltimore City has given so few women, particularly Black women, the opportunity to advance up the career ladder so that they qualify to hold such a position.”⁸ Welcome and many others in Baltimore hoped that Ford’s hire meant that past discriminatory practices were going to change.

And change was certainly needed. African Americans and women, and Black women in particular, had made important gains in municipal employment, largely in antipoverty and human-services agencies and low-wage support positions. Government jobs had compared favorably to the informal, low-wage jobs into which many Black workers had earlier been concentrated. But it was now the mid-1970s. African Americans expected and wanted better jobs and more influence. Yet they remained largely excluded from positions of power. In 1977, shortly before Ford assumed her post, members of the Community Relations Commission released a study that attended not only to race-based but also to sex-based inequities in the municipal workforce. It showed that white men held seventy-six of the city’s eighty-six top-paying jobs. White women occupied seven and Black men three of the remaining ten. Black women, who were the most numerous demographic in the municipal workforce, were not correspondingly represented in well-paying and influential positions. And Black men were not doing much better. In addition, outside of the Department of Education, only 25 percent of African Americans compared to 60 percent of whites earned more than $10,000 a year. And although Black workers made up the majority of the noneducation municipal workforce, many of their positions were federally funded, including vulnerable CETA jobs, whereas whites held over 60 percent of the city’s noneducation jobs financed by municipal revenue. Women as a group, meanwhile, made up most of the city’s clerical workforce, but beyond that they were well-represented only in health, education, and welfare agencies. Less than 30 percent of women earned salaries over $10,000 a year.⁹ Ford had her work cut out for her.

Despite the tough economic times, Ford arrived in Baltimore determined to implement equal opportunity in the municipal workforce and move people generally excluded from positions of leadership into those jobs. She was also aware that her ambitions generated anxiety and anger among those who benefited from the status quo. “We live in a society dominated by white males and white male egos and images. There is a certain resistance to changing the habits and patterns which have perpetuated this domination,” she explained. Nevertheless, she was prepared to make such changes. “That is not to say that people will be excluded,” she added. “It simply means we will have a greater mix in the kinds of people who make decisions.”¹⁰ To achieve her goals, Ford pursued multiple strategies. She took affirmative action by instituting hiring procedures that expanded the pool of candidates from which supervisors could choose when filling vacancies. And she was a particularly strong advocate on behalf of women. She conducted a major study of municipal clerical jobs and instituted a reclassification plan that resulted in wage increases for many. The change also created career ladders over some formerly dead-end jobs and moved the city’s clerical salaries closer to local prevailing wages. Baltimore Working Women, an organization that advocated on behalf of clerical workers and monitored municipal employment practices, lauded the changes. In addition, Ford held management workshops for women to encourage them to seek advanced positions, and she urged Schaefer to pursue calls from municipal employees for child-care services and other initiatives that would help them balance work and family obligations.¹¹

Baltimore’s civil service department was not alone in attempting to improve the employment status of women during the second half of the 1970s. Under pressure from women in its international union and probably local pressure as well, the predominantly male AFSCME leaders in Maryland also increased the attention they paid to issues of gender equity. The American Federation of Government Employees, which represented the predominantly female staff of the Social Security Administration—headquartered just outside of Baltimore—as well as other unions representing federal employees in and around Baltimore, undertook similar efforts. Organizations representing employees of the state of Maryland continued to lack official recognition, but they nonetheless advocated on behalf of their members and made gender-related demands.¹²

AFSCME’s efforts on behalf of gender equity were particularly noteworthy. During the early 1970s female staffers at AFSCME pushed AFSCME International to take seriously the fact that its membership included hundreds of thousands of women. The staffers pressed the union to take a strong stand opposing sex discrimination and to establish a committee tasked with addressing women’s concerns. Shortly thereafter, the International began to encourage its locals to address during contract negotiations such issues as maternity leave, child care, and gender-related inequities in fringe-benefits packages. The International also encouraged local unions to establish women’s committees and to consider the potential family obligations of women workers during organizing drives. In addition, women in the International and among the rank and file as well reminded the union of its need to clean its own house. By the mid-1970s, few women held positions of authority within the union. Feminists in AFSCME urged their male counterparts to encourage women to seek leadership positions and to include women on bargaining committees. Additionally, they pushed for more job-training opportunities for women and for AFSCME leaders to work with state and local government officials to create job ladders that would open opportunities for low-wage women workers.¹³

In Maryland, local AFSCME officials adopted a number of the recommendations coming from the International. In fact, Ernie Crofoot served as the vice chair on the International’s first women’s committee and gained a sense of women’s frustrations firsthand. Among the most aggressive actions Maryland locals took on behalf of women were investments in training programs and the creation of job ladders. These changes were of particular significance to African American women, who were concentrated at the bottom of most hierarchies. For hospital workers, AFSCME created training programs that enabled workers to advance from aides to nurses. The union built negotiated routes to advancement out of formerly dead-end jobs in the Department of Social Services as well. AFSCME officials also pressured the state and local governments to enforce equal-pay legislation. Over time, many bureaucracies had created sex-specific job titles for workers who performed essentially the same functions. The problem was pervasive in the custodial field, and AFSCME’s leaders combated the inequity and also encouraged women to seek so-called male positions because they offered more opportunity for advancement and better pay. Meanwhile, the number of women in the leadership of AFSCME locals and on bargaining committees began to increase, including in Baltimore. The changes proved a source of pride even for some old-school AFSCME leaders. Well after he retired, Ray Clarke considered the opportunities AFSCME created for women the most important contribution the union and he personally had made to the city.¹⁴

Successful efforts by the staff of the CRC, Ford, and the leaders and members of public-sector unions to improve the status of women as a group and of African American men in the municipal workforce enhanced the value of public-sector employment in the city’s otherwise deeply troubled economy. And the changes were profoundly important for Black women. In 1970, nearly a third of employed African American women in Baltimore held a job on the local, state, or federal level. By 1980, nearly 40 percent did. (The corresponding figures for Black men were 21 percent and 28 percent.)¹⁵ In a city plagued by structural male unemployment, improvements to Black women’s status in public-sector jobs were a matter of justice and also tremendously important to the economic health of African American families and communities. Attempts to make further improvements, however, were hampered rather than helped by the Democratic president that Black Baltimore had helped to elect in 1976.

“Poor and Working Americans Will Be the Prime Victims”: Carter’s Battle Against Inflation

Following the neglect of urban problems during the Nixon and Ford years, many in Baltimore had hoped that President Jimmy Carter would be a source of relief. On the campaign trail, the candidate had made enthusiastic promises to city residents. He had also proclaimed, “When I finish my term, I want Black people to say that I did more for them in my Presidency than any President in their lifetimes.”¹⁶ Despite healthy skepticism, many African Americans were willing to give him a chance. Nationally, Black voters were critical to Carter’s victory. And even in Baltimore, where Carter also garnered a lot of white support, Black city voters alone had given him the margin he needed to win Maryland’s electoral college votes. “Our Vote Did It,” proclaimed a banner headline in the Afro-American, and articles described the intensive voter registration and get-out-the-vote drives, which included free transportation to the polls and babysitting services.¹⁷ But following the victory, Black leaders lost little time before getting down to business. Expectations of the president were high. As Parren Mitchell commented, “We must now seek the rewards for our efforts” in the form of appointments to positions of authority in the federal government and policies helpful to African Americans.¹⁸ National civil rights leader Jesse Jackson, one of the new president’s early supporters, expressed the same sentiment but more poetically: “We selected him, elected him and now must collect from him.”¹⁹

Initially, Carter did try to respond to the concerns of his party’s traditional base. On assuming office, however, he inherited an economic crisis of both perplexing and alarming dimensions. Stagflation, the term coined to describe the phenomenon, combined rising unemployment and mounting inflation. The pairing defied conventional economic fixes; policies often used to lower unemployment tended to increase inflation, and remedies to counter inflation tended to worsen unemployment. Nevertheless, in keeping with the expectations of his core constituencies, Carter initially prioritized the battle against unemployment. As he had argued while accepting his party’s presidential nomination, “We simply cannot check inflation by keeping people out of work.”²⁰ He raised the minimum wage and passed a stimulus package intended to combat unemployment. Meanwhile, he also appointed record numbers of women and African Americans to positions in his administration. Patricia Roberts Harris, for example, became the secretary of the Department of Housing and Urban Development (HUD), making her the first African American women to hold a cabinet position and a key player in the direction of the nation’s urban policies.²¹

Regarding cities, the president attempted to follow through on his campaign promise for innovation by appointing a group of advisers to come up with a bold urban plan. He also directed a greater concentration of national resources to poor cities. By so doing, his administration responded to concerns that the distribution of Community Development Block Grants spread resources too thinly across jurisdictions with grossly divergent levels of need instead of concentrating them in cities with the most urgent problems. Federal officials revised the regulations governing the distribution of block grants so that they targeted poor cities. And in 1977, the administration used CETA funds to create 425,000 public-sector jobs.²²

Observers in Baltimore lauded the change in CDBG policy, hoping that increased funding for the city would help to combat pressing problems. Early indications were positive. Carter’s increased investment in CETA enabled the city to hire almost two thousand new workers. Under the leadership of Marion Pines, a white woman who led the Mayor’s Office of Manpower Resources, Baltimore’s CETA program had become a national model. Researchers found that the program’s participants had high and enduring employment rates even though the program nationally achieved more mixed results.²³ The success of the program, the Baltimore staff believed, demonstrated the positive results municipal agencies could produce if provided resources and a federal commitment. CETA training and job experience programs were far from perfect. Women, for example, often acquired skills likely to lead to low-wage service positions. Nevertheless, both male and female workers gained needed résumé-building experience, and those who won jobs often made important contributions to the city. As Pines explained, “We are providing some valuable services to low income communities through our training and work experience programs. Daycare for working mothers, health care for home-bound elderly persons, the weatherization of old homes, and the renovation of vacant houses provides real employment skills for CETA participants and much needed services to our communities” (emphasis in the original).²⁴ Carter’s move was a first step in the right direction—but he urgently needed to do more. In 1977, at just one of Baltimore’s manpower centers, employees typically arrived at work on the days that they accepted CETA applications to find fifty to a hundred job seekers waiting outside their doors.²⁵

Leaders of the nation’s liberal establishment, including representatives from civil rights organizations and labor unions, believed they had solutions for the nation’s ills that Carter should pursue. Plans had been under way since before the presidential election to secure a full-employment law from Congress. Full employment had been a policy objective of Franklin Roosevelt, and it was also a practice in place in many European nations. The United States, however, had yet to commit the full power of the federal government to guaranteeing its citizens jobs. Given the high rates of unemployment during the mid-1970s, along with other political calculations, the timing seemed perfect for a renewed campaign for full-employment legislation, many activists believed. Meanwhile, liberals also advocated for a host of other reforms to fight unemployment, including stimulus spending and a higher tax rate for the wealthiest, and labor leaders called for a national industrial plan. Unifying their demands was the conviction that even as the nation reeled simultaneously from high unemployment and inflation rates, the need for jobs was the more pressing national problem.²⁶

Carter, a self-described centrist, was not a ready convert to the liberal policy proposals. He had won the presidency when public mistrust of government was high. Stagflation, the nation’s defeat in Vietnam, the Watergate scandal, and Ford’s decision to pardon Nixon for any crimes he may have committed in office convinced many Americans that elected officials in Washington did not know what they were doing and could not be trusted. In an election year when a popular bumper sticker suggested “Don’t Vote; It Only Encourages Them,” Carter’s status as a Washington outsider held much appeal. During his campaign, although Carter certainly made promises, he also made his lack of name recognition rather than specific political proposals a selling point. Whereas Nixon had assiduously cultivated racial and other resentments among middle- and working-class whites to win the presidency, Carter relied on disdain for the political status quo to win votes. In fact, Carter did not even use the label “liberal” to describe himself.²⁷

In office, as the nation’s economic conditions worsened, Carter came under pressure not only from the left but also from the right to pursue specific policy proposals. Throughout his term, conservatives, such as economist Alan Greenspan, persistently demanded that Carter prioritize the battle against inflation rather than unemployment to combat the nation’s economic woes. An oil shock during the late 1970s worsened the nation’s economic troubles and intensified the urgency of the pleas for action. The U.S. automobile industry, once the symbol of American prosperity and strength, verged on the brink of collapse, and financial markets, the source of much new wealth in the postindustrial economy, also took a huge hit. If the status of the United States in the global economy had appeared bleak during Nixon’s watch, Carter confronted an even gloomier reality. Many of the president’s most trusted economic advisers subscribed to Keynesianism, but stagflation seemed to defy both their economic models and policy prescriptions. Meanwhile, conservative economists proffered neoliberal solutions they promised would bring inflation under control.²⁸

Among the remedies conservative economists proposed were fiscal restraint, tax cuts, and deregulation. The supply-side solutions were intended to stabilize the marketplace by reducing federal intervention and concentrating capital in the hands of elites, who the economists agreed could put it to its most productive uses and thus stimulate economic growth. To combat inflation, the economists asserted that only a severe contraction of the nation’s money supply would cure the problem. The remedy would also strengthen the dollar and help revive the currency in global markets, a vital step in the effort to reassert U.S. hegemony overseas. Keynesians balked at the monetarist remedy, which would inevitably spark recession and drive up unemployment. The nation’s workers, they argued, should not pay the highest price for economic recovery. But the sun was setting on the Keynesians’ reign as the neoliberal era continued to dawn.²⁹

In the face of mounting pressure to combat inflation, which came not only from ideologues but also from a wide range of Americans concerned about rising prices, Carter began adopting some of the policy recommendations of conservative economists. As the president’s priorities started to shift from fighting unemployment to combating inflation, he and his staff began replacing calls for social-welfare and job-producing initiatives with endorsements of balanced budgets. Indicative of the change, during a speech in Baltimore in 1978, Carter probably surprised many in his audience of Democrats when he enthused that his policy achievements included tax cuts, reducing the deficit, deregulation, “put[ting] the ‘free’ back into our free enterprise system,” and “get[ting] the government’s nose out of the business of the people.”³⁰ Though in town to stump for a Democrat, the president sounded like a Republican. Moreover, his policies and inflation-fighting strategies were recipes sure to increase unemployment and hardship in the very city where he was speaking. In response to his disappointing track record, many of Carter’s former supporters quickly became outspoken critics. “It is unjust to impose on the poor and on minorities the burden of achieving price stability in this country,” Vernon Jordan of the National Urban League charged.³¹

Certainly there were no pain-free solutions to the economic problems the nation faced. Parren Mitchell, who had served as the head of Baltimore’s Community Action Agency before becoming the city’s first Black congressional representative and then a founder of the Congressional Black Caucus, knew that well. During the late 1970s, Mitchell chaired the House Domestic Monetary Policy Subcommittee and signed off on some of the unemployment-inducing anti-inflation strategies that Carter pursued. And he did so while painfully aware that Carter’s strategies would benefit elite interests more than those of regular Americans and come at a particularly steep price for many of his African American and low-income constituents in Baltimore.³² Carter’s inflation-fighting remedies privileged the interests of those on Wall Street and came at the expense of those on Main Street. They also proved disastrous in the nation’s struggling cities that already had high unemployment rates.

While the anti-inflation efforts Carter pursued during the first half of his term cost urban residents social welfare measures and other reforms they had hoped for, the draconian strategies he sanctioned in 1979 and 1980 created far worse problems. In response to intensifying pressure, Carter took the dramatic step of enhancing the authority of the unelected members of the Federal Reserve Board, those who carried out the nation’s monetary policies by controlling the volume of dollars in circulation. During the post–World War II period, the ambition of full employment had generally guided the Fed’s policies. Moreover, its influence over the nation’s macroeconomic-policy priorities had been secondary to that of Congress’s. Carter veered sharply from precedent. In 1979, he appointed Paul Volcker to the helm of the Federal Reserve. Previously Volcker had headed the New York Federal Reserve and served in the Department of the Treasury under Presidents Kennedy, Johnson, and Nixon. He had earned his Wall Street credentials as an economist at Chase Manhattan Bank, and he was also well-known in elite financial circles globally. Volcker was a Democrat, an inflation hawk, and a prominent member of the banking establishment. He was Wall Street’s preferred man for the job, and his appointment represented a Carter concession to powerful banking interests, who wanted a sympathetic economist to tame inflation regardless of the employment costs or dire implications for residents in struggling cities. Under Volcker’s stewardship, which extended into the Reagan years, the Federal Reserve aggressively combated inflation. His remedies proved very costly. Although they ultimately helped to reduce inflation, they also plunged the country into the worst recession since the Great Depression and drove the unemployment rate into the double digits.³³

The Volcker years at the Fed marked a significant turning point in the history of the institution and had long-term as well as immediate implications for residents of rust-belt cities such as Baltimore. Even after inflation later abated, constraining it—rather than maximizing employment and wages—remained the priority of the members of the Federal Reserve. The change buoyed the fortunes of the nation’s financial sector and investor class but came at the expense of the nation’s manufacturing sector and American workers, including those in deindustrializing cities. Fortunes to be made on Wall Street, insulated by the Fed’s anti-inflation commitment, made investment in industry in the United States less appealing by comparison, especially in the context of the liberalizing global economy. Carter’s appointee to the Fed, in other words, contributed significantly to what scholars have called the financialization of the American economy. Economic activity in the realm of finance, insurance, and real estate soon eclipsed manufacturing as the engine of the American economy, which would often compel nationally elected officials to defer to the demands of elite interests over the needs of average citizens. Nixon had abandoned the Bretton Woods system and begun building its free market–oriented replacement. Carter’s contribution to the new neoliberal world order was a reordering of American macroeconomic priorities in a manner that privileged financial interests. The changes did not bode well for jobless and low-income residents in Baltimore.³⁴

Not surprisingly, liberals responded in outrage to both the Volcker appointment and Carter’s policy concessions. In 1980, William Lucy, the secretary-treasurer of AFSCME International, described a political landscape that was in the midst of dramatic transformation. “We currently have a Democratic administration, elected largely by labor and minorities, pursuing probusiness economic policies—high interest rates, scarce money and cutbacks in public spending for human services.… Poor and working Americans will be the prime victims,” he predicted.³⁵ Carter’s policy decisions represented significant departures from the macroeconomic strategies the Democratic Party had pursued since the 1930s. From the New Deal onward, the party had engaged in a very delicate balancing act. Democrats pursued measures that advanced profit-making and corporate interests. They simultaneously maintained a measure of commitment to wealth redistribution and considered themselves the caretakers of the nation’s workers and welfare state. During the late 1970s, Carter turned his party sharply to the right. His policy choices and commitments made it difficult for many Americans to remember that the Democratic Party had once fancied itself the champion of the people and a foe of the forces of unrestrained capitalism. The Democrats seemed to have switched teams.

The ramifications of Carter’s macroeconomic policies in Baltimore were devastating. At the end of the 1970s, the city had the second highest African American unemployment rate in the country, surpassed only by Philadelphia. The U.S. Bureau of Labor Statistics reported the unemployment rate for Black workers in Baltimore at 18 percent, a figure that had climbed from 15 percent in 1977 and was four times higher than the white rate. An economist with the labor bureau hypothesized that the high Black unemployment figure in Baltimore resulted from the large number of African Americans who were actively seeking jobs. Federal officials did not include the “discouraged,” individuals who lacked work but were not in the job market, in unemployment calculations. Employees of the Mayor’s Office of Manpower Resources thought the economist was right. Job training and work experience that they provided, they believed, had convinced formerly discouraged African American workers in the city to seek jobs. But the job seekers graduated into Baltimore’s depressed labor market. And if employment prospects for Black workers were bad in 1979, as Mitchell correctly predicted, things were only going to “get worse.”³⁶ For a man who wanted “Black people to say that [he] did more for them … than any President in their lifetimes,” Carter proved a tremendous disappointment.³⁷

“A Collision Course”: Carter’s Urban Plan

The urban policies that Carter pursued also evinced a betrayal of earlier ideals of the Democratic Party. At the beginning of his presidency, Carter had created a task force charged with breathing life into the bold urban agenda he had promised but not specified as a candidate. The macroeconomic strategies he adopted to fight inflation, however, severely constrained the options its members could realistically consider, and they made little headway for over a year. “We are on a collision course between the demands of the urban constituency and the demands for a balanced budget,” one high-ranking official at the Department of Housing and Urban Development told the New York Times in 1977. Another anonymous administration official noted, “We’re in a pretty tight box politically. We’ve got a real problem with the people who put this President in office.” In early 1978, word leaked that the urban policy task force was considering proposing targeted commercial redevelopment programming to the exclusion of social welfare programs as their major initiative. The people who put the president in office reacted with anger, and even Harris, the secretary of HUD, expressed misgivings. Given ongoing deindustrialization and the tight credit squeeze, which prevented cities from easily securing funds for capital improvements, few urban advocates opposed commercial development initiatives categorically. But Harris echoed the concerns of many when she worried that White House staffers and other federal officials were pressuring the urban advisers to forgo social welfare initiatives entirely. “Let us remember,” she cautioned, “that economic development is not the penicillin for urban decay, if at the same time there are no hospitals, no low-cost housing and no decent transportation.”³⁸

The leaders of the National Urban League (NUL) were more than ready to supply the task force with an aggressive urban policy plan. By the mid-1970s, the NUL was over a decade removed from its earlier history as the voice of moderation within the civil rights movement. Under the leadership of Whitney Young Jr., who became the organization’s president in 1961, the NUL had become increasingly politically active, joining the nation’s other leading civil rights organizations in assertively demanding increased federal commitments to both racial and economic justice. Vernon Jordan Jr., who succeeded Young as the organization’s executive director in 1972, shared his predecessor’s commitment to a broad progressive agenda. In fact, during the second half of the 1970s, Jordan helped the NUL to become one of the nation’s most prominent civil rights organizations—and a source of sharp criticism of the Carter administration. During the 1960s, Young had proposed that the Johnson administration create an “urban Marshall plan.” The original Marshall Plan, the more than $13 billion that the United States committed to helping rebuild Europe following World War II, had been remarkably successful. Surely the United States should make a similar commitment to its own cities, Young reasoned. Jordan resurrected the idea and pressed Carter to commit $50 billion to urban aid. Civil rights leaders also weighed in on the form urban aid should take. Aware of the difficulties many cities faced attracting and retaining businesses, they acknowledged the need for grant programs aimed at facilitating physical renewal and encouraging private investment. They also, however, considered social welfare initiatives indispensable. “The connection between economic incentives and social programs is crucial,” one leader argued. “You can’t plan one side without the other.”³⁹ Jordan also cautioned against a onesided approach. “The way to save cities isn’t to abandon them to the mercies of speculators. The cities will be revitalized through programs that help the poor, preserve and improve their neighborhoods and ensure their participation in decisions that affect their lives.”⁴⁰ Overall, full-employment legislation, affirmative action, and a much stronger social safety net—in addition to programs that incentivized private investment in cities—were the ingredients needed to effectively combat urban poverty, civil rights activists argued.⁴¹

Officials from AFSCME International, whose members included many in the nation’s struggling cities, also had policy recommendations for Carter. Although the union’s leaders tended to share the progressive agenda of civil rights leaders, their contribution to the urban policy debate largely focused on economic formulas needed to maintain service delivery. To help poor cities better weather the vagaries of the business cycle, they advocated for countercyclical federal aid. Union officials also urged the federal government to use the power it wielded over the distribution of intergovernmental revenue to compel state and local governments to adopt more progressive tax structures to fund public services. In addition, AFSCME advocated that state governments redistribute tax revenue from richer to poorer jurisdictions to fund services. To combat unemployment in struggling cities, AFSCME leaders favored urban economic development programs and stimulus spending to encourage private-sector job growth. In addition, despite their suspicion of what they called “make-work schemes,” which they feared would result from the adoption of full-employment legislation and which they believed would threaten hard-won gains they had achieved for their members through collective bargaining, they did also endorse limited and targeted public-sector job creation.⁴²

The debates on the federal level concerning the appropriate balance to be sought in urban planning between commercial revitalization projects and social-welfare initiatives mirrored battles well under way in Baltimore. Moreover, individuals seasoned in the trenches of Baltimore figured prominently in the national conversations. Not only had Mitchell moved from leading his city’s War on Poverty to championing full-employment legislation and affirmative action in Congress; he was also leading attempts in that body to redirect resources within the federal budget toward HUD and the Department of Health, Education, and Welfare. Simultaneously, another Baltimore native worked toward a different goal. Robert C. Embry Jr., the former director of Baltimore’s Department of Housing and Community Development and a driving force behind his hometown’s ongoing commercial revitalization efforts, was the chair of Carter’s urban policy task force.⁴³

During a campaign stop in Baltimore, then presidential candidate Carter had been favorably impressed by the downtown redevelopment efforts under way in the city. Although antipoverty workers had gotten the city to move beyond brick-and-mortar responses to poverty, commercial revitalization had continued apace in the city during the 1960s and 1970s. From his post at the helm of Housing and Community Development, Embry had played a significant role in the efforts. Much of the responsibility for balancing the city’s commitment to commercial revitalization and neighborhood concerns had fallen to Embry after he assumed the directorship in 1968. He evinced a genuine empathy for residents of the city’s poor communities. During the 1960s, he acceded to the demands of public-housing activists for resident participation in decision-making. He also led efforts to include residents in housing-related decision-making on the national level. During the early 1970s, however, Embry’s commitment to community participation seemed to wane. As the city consolidated into a single entity its Community Action Agency and Model Cities program, Embry advised the mayor to abolish the advisory boards of the older agencies, even though they were the only bodies in the city government in which African American women and people with low incomes held significant influence. He urged the mayor instead to make the director of the new antipoverty agency accountable only to the mayor. As Embry’s confidence in War on Poverty–era strategies dimmed, his enthusiasm for public-private redevelopment ventures persisted. He worked in collaboration with the leadership of the Greater Baltimore Committee, an influential organization of business executives committed to revitalizing the city’s downtown commercial district. Embry’s skillful management of public-private initiatives in Baltimore piqued Carter’s interest, and on winning the White House, Carter invited Embry to serve as assistant secretary of HUD. Embry arrived in Washington hoping to help other cities adopt some of Baltimore’s commercial revitalization strategies.⁴⁴

The urban policy task force that Embry chaired concluded its deliberations in early 1978, and in March, Carter unveiled his urban program. Although the policy advisers had added a small budget for social-welfare initiatives, the thrust of the $10.4 billion two-year program was trickle-down economic redevelopment. In his National Urban Policy Message to the Congress, Carter explained that his goal was to “combin[e] the resources of Federal, State and local government, and us[e] them as a lever to involve the even greater strength of our private economy to conserve and strengthen our cities and communities.”⁴⁵ To that end, the administration created Urban Development Action Grants (UDAGs), which made available federal funds to stimulate private investment in distressed cities. Although the law did not initially state that the funds had to be used exclusively for commercial development, HUD’s selection process typically limited them to that purpose. Both cities and investors could qualify for support once investors committed to a viable project, which could be anything from an industrial park to a shopping mall.⁴⁶

In addition to introducing UDAGs, the Carter administration also directed the Economic Development Agency, created during the mid-1960s as part of the Johnson administration’s assault on rural poverty, to make available to struggling cities funds for commercial enterprises. Further, the administration loosened restrictions on the use of CDBG money so the funds could be used to help cities attract new businesses. To be sure, poor cities were in desperate need of investors. Nevertheless, as the task force’s early critics had warned, enticements for investors could hardly stand alone as an adequate solution to the nation’s severe urban problems. Ultimately, however, Carter’s concern with inflation—and his willingness to sacrifice the aspirations of the poor and unemployed in pursuit of stabilizing the dollar—prevented him from doing more for cities and eventually led him to do less. In early 1979, Jordan of the NUL reported, “This year we are reduced to trying to preserve the few and relatively meager [urban and social welfare] programs currently in existence.”⁴⁷ And the prospects of low- income urban residents for relief from the federal government only grew bleaker. By the end of his term, Carter had cut overall federal aid to cities.⁴⁸ Having prioritized the battle against inflation over combating unemployment, the Democratic president introduced Baltimore and other city residents to trickle-down economics before the Reagan revolution even began.

Certainly, Carter was not the only one to blame. Liberals also faulted Congress, including a fresh crop of New Democrats who did not aspire to the redistributive aspirations of New Dealers. Although Mitchell had himself been elected as a party outsider in 1970, he derided fellow Democrats voted into office in and after 1974 for “abandon[ing] this great liberal reform” and blithely falling into line with more conservative critics of government.⁴⁹ Meanwhile, Jordan, outraged that Democrats in Congress weakened both full-employment efforts and Carter’s evolving urban program, charged that Congress had become “a negative force in the country” instrumental in the “national backlash against the poor and minorities.… Today … we see the formation of a new negativism in America that calls for a weak, passive government, indifference to the plight of the poor and abandonment of affirmative action.… People are not merely saying no to higher taxes and inflation; they are saying no to inclusion of black and brown people into the mainstream.”⁵⁰ From the vantage point of those still committed to the earlier ideals of their party, Democrats in both the White House and Congress were moving the party and the nation in the wrong direction.

In early 1977, shortly before Carter took the oath of office, the editors of the Afro-American had complained of locally elected officials who were more concerned with Baltimore’s attractiveness to investors than to the well-being of its citizens. They had urged the city’s leaders to attend to problems at the city’s core instead of “polishing the outside of the apple.”⁵¹ They, along with other Black leaders, also had relentlessly pressed the mayor for positions of authority for African Americans in the municipal government so that representatives of Black Baltimore could play a role in setting the city’s priorities and determining its revitalization strategies. Carter, a Democratic president who Black Baltimore contributed to electing, did not help the city’s African American leaders move toward their goals. To be sure, African Americans and white women made gains in public-sector employment, and both the city’s personnel director and government unions had improved some of the terms and conditions enjoyed by many workers. But stagflation had wreaked havoc on the local economy, and Carter’s attempts to tame inflation came at the cost of municipal job freezes, layoffs, service reductions, and worsening unemployment rates. Moreover, the president’s macroeconomic policies further dimmed prospects that the city’s manufacturing sector could make a recovery. The policies had also largely limited his urban advisers to recommendations weighted heavily in favor of apple-polishing revitalization strategies. But not everyone in Baltimore was disappointed with Carter’s urban plan. The city’s mayor, for one, could think of quite a number of ways to use UDAGs and the other public-private funds Carter had made available to struggling cities.