A pointless but costly government shutdown, a close shave with national default -- these Tea Party-induced crises have many people at home and abroad wondering if American democracy still works. It does, only not so much in Washington.

Our national government is paralyzed by extremists who disdain compromise and majority rule. But look outside of Washington, and you’ll see that state and especially local governments haven’t lost their ability to solve public problems.


Thank heaven for American federalism. Its subtle dynamics seem to ensure that not every level of our government can be broken at the same time.

About 20 years ago, for example, the nation’s big cities were synonymous with dysfunction. From New York to Detroit, Cleveland to Los Angeles, U.S. urban centers were beset by deindustrialization and rising poverty, soaring crime rates, municipal corruption, racial friction and middle class flight to the suburbs.

Overwhelmed by this concatenation of economic and social maladies, many urban leaders took refuge in victimhood and looked to Washington for salvation. The U.S. Conference of Mayors seemed to develop a cargo cult mentality, waiting like Pacific islanders during World War II for pallets of federal aid to drop miraculously from the sky.

It never came. Instead a new wave of reform-minded mayors came to power preaching self-reliance and homegrown solutions to local problems. They used data-driven analysis and community policing to drive crime rates down. They reduced welfare dependency and demolished public housing complexes that concentrated and isolated the poor. Some brave souls took over failing urban school systems, cutting swollen central bureaucracies, holding teachers accountable and launching innovative charter schools.

Fast forward to today. America’s cities and metro regions are now the star performers of our federal system. As Bruce Katz and Jennifer Bradley argue in The Metropolitan Revolution, cities and metro regions are now America’s main hubs of economic innovation and dynamism. They are reviving the U.S. economy from the ground up.

Let’s take a surprising example: New Orleans. Since the ravages of Hurricane Katrina, the Big Easy has reinvented itself as a hive of entrepreneurship and a magnet for young and highly educated workers. Forbes ranked New Orleans number one in IT job growth. Another ranking of America’s “cities of aspiration,” which blends economic performance, quality of life measures and demographics, lists New Orleans second behind Austin. New Orleans is also leading the transformation of urban education in the United States. An amazing 80 percent of its students attend charter schools, and -- more amazing still -- they are on track to become the first in the nation to outperform students in the rest of the state.

New Orleans also benefits from dynamic political leadership and a cooperative civic culture. Mayor Mitch Landrieu is a tough-minded progressive who has cut the city’s budget by a quarter, spun off inefficient public health clinics and forced the city’s regulators to dramatically speed up licensing and permitting. Voicing a pragmatism that’s all too rare in the ideological hothouse of Washington, Landrieu notes that “government can be too big and too small at the same time.” He has also launched the New Orleans Business Alliance, the first public-private partnership for economic development, and has used money freed by his “cut and invest” approach to upgrade municipal infrastructure and improve public safety (an astronomical murder rate is the city’s biggest problem). 

While Washington fixates on GOP demands to eviscerate government spending, local and metro leaders are leading the charge for jobs and economic growth. Houston, writes Derek Thompson in The Atlantic, has become the Spindletop of job creation, adding more than two jobs for every one it lost in the Great Recession. Cities like Portland and Tampa are concentrating on boosting exports into global markets. In Northeast Ohio, Cleveland and other cities are collaborating on joint strategies to become a hub of advanced manufacturing, targeting 3-D printing in particular. After the financial meltdown, New York City Mayor Michael Bloomberg launched an imaginative competition to attract engineering and applied science campuses to the city, to lessen the city’s economic dependence on Wall Street.

In fact, cities and metros that are doing well -- from San Francisco to Provo, Utah to Loudoun County, Virginia -- seem to have this in common: Strong growth in the tech/information sector. A new study by PPI economist Michael Mandel finds that counties with a higher number of tech and IT jobs weathered the recession better than others and have enjoyed substantially faster growth in overall employment during the recovery.

So conservative myth notwithstanding, government in America is working. It’s working at the local and metro level, where political, business and civic leaders are collaborating to create good jobs and put our country back on the road to shared prosperity.

Marshall is the president of the Progressive Policy Institute.