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The Bonds of Inequality: Debt and the Making of the American City
Indebtedness, like inequality, has become a ubiquitous condition in the United States. Yet few have probed American cities’ dependence on municipal debt or how the terms of municipal finance structure racial privileges, entrench spatial neglect, elide democratic input, and distribute wealth and power.
In this passionate and deeply researched book, Destin Jenkins shows in vivid detail how, beyond the borrowing decisions of American cities and beneath their quotidian infrastructure, there lurks a world of politics and finance that is rarely seen, let alone understood. Focusing on San Francisco, The Bonds of Inequality offers a singular view of the postwar city, one where the dynamics that drove its creation encompassed not only local politicians but also banks, credit rating firms, insurance companies, and the national municipal bond market. Moving between the local and the national, The Bonds of Inequality uncovers how racial inequalities in San Francisco were intrinsically tied to municipal finance arrangements and how these arrangements were central in determining the distribution of resources in the city. By homing in on financing and its imperatives, Jenkins boldly rewrites the history of modern American cities, revealing the hidden strings that bind debt and power, race and inequity, democracy and capitalism.
In this passionate and deeply researched book, Destin Jenkins shows in vivid detail how, beyond the borrowing decisions of American cities and beneath their quotidian infrastructure, there lurks a world of politics and finance that is rarely seen, let alone understood. Focusing on San Francisco, The Bonds of Inequality offers a singular view of the postwar city, one where the dynamics that drove its creation encompassed not only local politicians but also banks, credit rating firms, insurance companies, and the national municipal bond market. Moving between the local and the national, The Bonds of Inequality uncovers how racial inequalities in San Francisco were intrinsically tied to municipal finance arrangements and how these arrangements were central in determining the distribution of resources in the city. By homing in on financing and its imperatives, Jenkins boldly rewrites the history of modern American cities, revealing the hidden strings that bind debt and power, race and inequity, democracy and capitalism.
320 pages, Hardcover
First published April 29, 2021
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714 people want to read
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Displaying 1 - 16 of 16 reviews
December 8, 2024
This book absolutely convinced me that understanding municipal bonds is essential for understanding the shape and trajectory of the modern city. It's focused on San Francisco (a fact that really should be more apparent in the title), but there's clearly ample room for someone to write more broadly on the topic. I hope someone does; I also hope that someone has a more fluid writing style than Jenkins.
(I mark "I am not the right audience" because this is a 301-level text, and I frankly do not have the 201-level grounding in finance that Jenkins assumes out of hand. I did the best I could! But this is not a book that stops and explains things. As a Californian, I spent much of the book, which is chronologically organized, braced for 1978 and the passage of Proposition 13, which was clearly going to upend everything, and not for the better. It was like the lurking monster in a horror story. And indeed! Proposition 13 came along and upended everything.
...did Jenkins ever spell out what Proposition 13 was? Not really, no, not even in a footnote. If you don't go in with a high level of background knowledge on finance and California politics, be prepared to spend a lot of time looking things up.)
(I mark "I am not the right audience" because this is a 301-level text, and I frankly do not have the 201-level grounding in finance that Jenkins assumes out of hand. I did the best I could! But this is not a book that stops and explains things. As a Californian, I spent much of the book, which is chronologically organized, braced for 1978 and the passage of Proposition 13, which was clearly going to upend everything, and not for the better. It was like the lurking monster in a horror story. And indeed! Proposition 13 came along and upended everything.
...did Jenkins ever spell out what Proposition 13 was? Not really, no, not even in a footnote. If you don't go in with a high level of background knowledge on finance and California politics, be prepared to spend a lot of time looking things up.)
September 27, 2022
Generally strong. Certainly a powerful expository piece on a greatly under-covered aspect of urban history. Jenkins does a particularly strong job at illustrating tensions between technocracy and democracy and the tradeoff (often implicit, sometimes explicit) in power-sharing between the two.
A few problems I have:
1. The work does better at exposition than comparison. Jenkins certainly illustrates both the anti-democratic and anti-egalitarian results that come from bond market interactions. I am less convinced from the work of the uniqueness of the latter point; that San Francisco voters wouldn't have acted similarly were they given direct input. While the bankers are certainly detached from urban problems and class/race divides, the city's technocratic officials that Jenkins depicts as too detached from democratic decision making appear to be more progressive than the electorate at large.
2. The elevation of various groups seemed inconsistent. The lack of investment in Black communities and neighborhoods is certainly a key result of the city's bond reliance and merits its coverage. At the same time, Jenkins himself repeatedly refers to the small size of the African American minority compared to peer groups in other cities or other racial minorities in San Francisco itself. The book mentions Chinatown once or twice, but otherwise hardly mentions the Asian or Hispanic populations--both much larger numerically and group with fascinating economic trajectories over the book's period. This seems like somewhat of a large oversight to me.
Overall, I mostly enjoyed it.
A few problems I have:
1. The work does better at exposition than comparison. Jenkins certainly illustrates both the anti-democratic and anti-egalitarian results that come from bond market interactions. I am less convinced from the work of the uniqueness of the latter point; that San Francisco voters wouldn't have acted similarly were they given direct input. While the bankers are certainly detached from urban problems and class/race divides, the city's technocratic officials that Jenkins depicts as too detached from democratic decision making appear to be more progressive than the electorate at large.
2. The elevation of various groups seemed inconsistent. The lack of investment in Black communities and neighborhoods is certainly a key result of the city's bond reliance and merits its coverage. At the same time, Jenkins himself repeatedly refers to the small size of the African American minority compared to peer groups in other cities or other racial minorities in San Francisco itself. The book mentions Chinatown once or twice, but otherwise hardly mentions the Asian or Hispanic populations--both much larger numerically and group with fascinating economic trajectories over the book's period. This seems like somewhat of a large oversight to me.
Overall, I mostly enjoyed it.
September 9, 2022
every time i experience myself learning about something i don't understand well in real time and coming away with more comprehension i'm like damn.... has anyone heard of this experience before...
November 6, 2022
The story is often told of the fall of the industrial postwar city—suburban sprawl through the formation of new utopian communities and white flight toward them; tax revenues leaving the city with the flight of the Fordist family who has the ability to leave, alongside the flight of businesses in search for cheaper land or cheaper labor; public housing and supposed ‘urban renewal’ projects worsening conditions for inner-city black residents already out of work and confined to inadequate and exploitative housing supply; those residents displaced by highway construction and other capital improvements for white suburbanites’ work and play. This history is illustrative of many Midwestern cities like Detroit or Hartford—cities with dominant industries and firms which their economies depended on, who abandoned the city, with black communities trapped in the left-behind neighborhoods.
Instead of focusing on industrial decline and suburbanization, this book follows the fiscal crisis of San Francisco, a city with a much different outcome than Detroit and whose postwar history is a little less apparent. Not specific to SF by any means, Jenkins outlines how city officials’ total dependence on municipal bondholders and credit rating agencies inhibits democratic decision making, equitable public investment in infrastructure, or the fulfillment of campaign promises.
While the usual stories of gentrification and a housing shortage are accurate, Jenkins focuses on an urban fiscal crisis that stems from SF and other cities’ reliance on the municipal bond market. The prioritization of good credit ratings leads cities to subvert democracy and political mobilization in pursuit of stability and attractiveness in the eyes of investors—leading to spacial neglect and, ultimately, an inability to invest in their citizens altogether. This always hits communities of color harder.
Instead of funding public schools, playgrounds, or water and sewer systems, cities must focus on levying user fees in order to simply make interest payments on the debt that financed infrastructure that was intended to bring in new capital, rather than to improve the quality of life for those who already live there. Centering your local economy on Finance, Insurance, and Real Estate does not save you from the urban fiscal crisis or ensure that your credit rating remains good; it might just give banks more intimate control over your city.
Cities’ dependence on volatile interest rates, subjective ratings, and profit-seeking bankers inhibits political possibilities and invests in the very people who set the terms of financing. The picture painted in the book is another insight into how the American city is totally restricted from its potential. I think some kind of alteration to U.S. federalism is necessary to ensure cities aren’t alone and powerless to this kind of system—like revenue sharing on some grander scale between municipalities or between levels of government, or more political freedom from the states that charter them.
Instead of focusing on industrial decline and suburbanization, this book follows the fiscal crisis of San Francisco, a city with a much different outcome than Detroit and whose postwar history is a little less apparent. Not specific to SF by any means, Jenkins outlines how city officials’ total dependence on municipal bondholders and credit rating agencies inhibits democratic decision making, equitable public investment in infrastructure, or the fulfillment of campaign promises.
While the usual stories of gentrification and a housing shortage are accurate, Jenkins focuses on an urban fiscal crisis that stems from SF and other cities’ reliance on the municipal bond market. The prioritization of good credit ratings leads cities to subvert democracy and political mobilization in pursuit of stability and attractiveness in the eyes of investors—leading to spacial neglect and, ultimately, an inability to invest in their citizens altogether. This always hits communities of color harder.
Instead of funding public schools, playgrounds, or water and sewer systems, cities must focus on levying user fees in order to simply make interest payments on the debt that financed infrastructure that was intended to bring in new capital, rather than to improve the quality of life for those who already live there. Centering your local economy on Finance, Insurance, and Real Estate does not save you from the urban fiscal crisis or ensure that your credit rating remains good; it might just give banks more intimate control over your city.
Cities’ dependence on volatile interest rates, subjective ratings, and profit-seeking bankers inhibits political possibilities and invests in the very people who set the terms of financing. The picture painted in the book is another insight into how the American city is totally restricted from its potential. I think some kind of alteration to U.S. federalism is necessary to ensure cities aren’t alone and powerless to this kind of system—like revenue sharing on some grander scale between municipalities or between levels of government, or more political freedom from the states that charter them.
April 22, 2021
I can’t recommend this book highly enough. It might be the most important book on municipal bonds...(ever)? It’s an urgent and timely book to understand how financing decisions and control of the municipal bond market shaped everything from where parking garages were built to which children got asthma.
July 10, 2024
Frustrating read. I think the core thesis is sound, if a bit overreaching. The way municipal finance functions in the US absolutely perpetuates racial and socioeconomic inequities, and this is an ongoing topic of discussion in the industry.
Unfortunately, this book doesn't really provide a convincing argument as to why municipal debt markets in particular had an outsized or critical impact on inequality in the postwar period as compared to, say, deindustrialization, exclusionary zoning, white flight, etc. The detailed history of San Francisco's experience is interesting, but I think it's a stretch to extrapolate the experience of one city to generalize about the use of municipal debt generally (though the author does mention the need for further study in the epilogue).
The book also really suffers from dry writing filled with academic jargon as well as sloppy editing. Feels quite rushed at times (especially the epilogue) while at other times like a padded out PhD thesis or long form article. Use of certain bizarre terms that are never defined (Keynesian capitalism?), lots of claims that lack context, and inconsistent use of acronyms and defined terms that had me confused constantly.
I think the book's biggest weakness overall is the glossing over of how these bond and note issues actually worked. As best as I can tell, there's not even a basic description of what a muni bond is, and important topics like federal tax exemption on bond interest are just kind of glossed over. And without the basics included to ground the reader in the detailed history that follows, it's hard to grasp the supposed significance of what the author claims. It also suggests that the author may not have a particularly deep understanding of the mechanics of municipal bond transactions (or if they do, it's not readily apparent from text). Which, by itself is fine--they are a historian--but it weakens the book significantly. Hard to tell just from the acknowledgements section alone but I think this book would have benefited from pre-reads from practitioners in the industry.
Unfortunately, this book doesn't really provide a convincing argument as to why municipal debt markets in particular had an outsized or critical impact on inequality in the postwar period as compared to, say, deindustrialization, exclusionary zoning, white flight, etc. The detailed history of San Francisco's experience is interesting, but I think it's a stretch to extrapolate the experience of one city to generalize about the use of municipal debt generally (though the author does mention the need for further study in the epilogue).
The book also really suffers from dry writing filled with academic jargon as well as sloppy editing. Feels quite rushed at times (especially the epilogue) while at other times like a padded out PhD thesis or long form article. Use of certain bizarre terms that are never defined (Keynesian capitalism?), lots of claims that lack context, and inconsistent use of acronyms and defined terms that had me confused constantly.
I think the book's biggest weakness overall is the glossing over of how these bond and note issues actually worked. As best as I can tell, there's not even a basic description of what a muni bond is, and important topics like federal tax exemption on bond interest are just kind of glossed over. And without the basics included to ground the reader in the detailed history that follows, it's hard to grasp the supposed significance of what the author claims. It also suggests that the author may not have a particularly deep understanding of the mechanics of municipal bond transactions (or if they do, it's not readily apparent from text). Which, by itself is fine--they are a historian--but it weakens the book significantly. Hard to tell just from the acknowledgements section alone but I think this book would have benefited from pre-reads from practitioners in the industry.
June 15, 2022
This is a well-written account of a dry topic.
If you’re interested in the history of municipal finance you could do worse than follow San Francisco’s experience and the author weaves in the record of shameful in jokes among financiers. You’ll also be educated a bit about how interest rates affect what cities can do and, like banks, prejudice is common among skittish lenders in bad times.
I found the left-wing perspective refreshing — the excellent Imperial San Francisco comes to mind — given how a right wing perspective dominates this topic but sometime the author lays on too thick in my view the idea of “extractive” finance (the adjective has to be used more than 50 times) and the concept of investing in “whiteness”.
The approach of talking about actions that that the subjects think are neutral or even good as in fact evil actions because they perpetuate evil systems seem normalized in academia but foreign to most readers and I felt like there was some attempted gaslighting going on but that could be just that the right-wing perspective that things are intended neutral/good gets heard so much more.
For the first, bond buyers get interest from the local government from lending money but it’s not like loans are a new thing in human history nor is evidence presented that cities are getting hoodwinked by lenders.
For the second, if you have some I knowledge of San Francisco geography the idea that only white neighborhoods got capital spending totally makes sense — but why say “whiteness” when “white people” would make sense to both an academic and general audience. It would be interesting to see if there eventually be attempts to remediate this history (not to my knowledge).
If you’re interested in the history of municipal finance you could do worse than follow San Francisco’s experience and the author weaves in the record of shameful in jokes among financiers. You’ll also be educated a bit about how interest rates affect what cities can do and, like banks, prejudice is common among skittish lenders in bad times.
I found the left-wing perspective refreshing — the excellent Imperial San Francisco comes to mind — given how a right wing perspective dominates this topic but sometime the author lays on too thick in my view the idea of “extractive” finance (the adjective has to be used more than 50 times) and the concept of investing in “whiteness”.
The approach of talking about actions that that the subjects think are neutral or even good as in fact evil actions because they perpetuate evil systems seem normalized in academia but foreign to most readers and I felt like there was some attempted gaslighting going on but that could be just that the right-wing perspective that things are intended neutral/good gets heard so much more.
For the first, bond buyers get interest from the local government from lending money but it’s not like loans are a new thing in human history nor is evidence presented that cities are getting hoodwinked by lenders.
For the second, if you have some I knowledge of San Francisco geography the idea that only white neighborhoods got capital spending totally makes sense — but why say “whiteness” when “white people” would make sense to both an academic and general audience. It would be interesting to see if there eventually be attempts to remediate this history (not to my knowledge).
January 27, 2022
I'll concede, it may have been arrogant of me as a total dilettante in economics to approach a book this specialized and as deep in original research and expect a stirring page-turner – I mean, there's "micro-histories", sure, but then there's "200+ pages on San Francisco's municipal bond market in the latter half of the 20th century."
Not that there's nothing in here for those of us who aren't economic historians - I learned a ton about the nuts and bolts of municipal finance, about the power dynamics of rating agencies, and the curious subculture of bondsmen. But however much the jacket and title might signal a "Popular Non-Fic History with strong narrative elements that stokes the reader's indignation" genre approach, the tone is closer to the understated analysis in a well-executed government committee report (more astute reader's could've probably inferred this right away just by noticing the high ratio of pages dedicated to citations vs. the main text). It's compelling stuff, but maybe only just enough so to get a half-chapter in each night to ease you into sleep.
That said: a worthy topic, and what I hope will be the first of many more city-specific "How the sausage gets made"-type exposés I'll get around to
Not that there's nothing in here for those of us who aren't economic historians - I learned a ton about the nuts and bolts of municipal finance, about the power dynamics of rating agencies, and the curious subculture of bondsmen. But however much the jacket and title might signal a "Popular Non-Fic History with strong narrative elements that stokes the reader's indignation" genre approach, the tone is closer to the understated analysis in a well-executed government committee report (more astute reader's could've probably inferred this right away just by noticing the high ratio of pages dedicated to citations vs. the main text). It's compelling stuff, but maybe only just enough so to get a half-chapter in each night to ease you into sleep.
That said: a worthy topic, and what I hope will be the first of many more city-specific "How the sausage gets made"-type exposés I'll get around to
February 26, 2025
By showing how reliance on municipal bonds shaped cities in the 20th century, this book introduced me to a completely unfamiliar facet of urban political economy. I’m especially impressed with this historical work because these (initially very small) financial markets can seem like such a hidden component of history, but Jenkins uncovers a lot of very informative detail.
Personally, I could have gone without the kind of anthropological sections on the bondsmen’s fraternity-like networks, which added color and context but ultimately seemed kind of secondary to the book’s main themes.
I’m left with a lot to chew on today, especially watching Chicago and the Twin Cities each deal with major fiscal challenges of their own. In Chicago especially, it’s impossible to avoid the constraints and discipline that municipal bond markets exert. Unfortunately, that’s a problem without a clear solution, but at least this book can offer some clear lenses with which to look at this as a structural issue.
Personally, I could have gone without the kind of anthropological sections on the bondsmen’s fraternity-like networks, which added color and context but ultimately seemed kind of secondary to the book’s main themes.
I’m left with a lot to chew on today, especially watching Chicago and the Twin Cities each deal with major fiscal challenges of their own. In Chicago especially, it’s impossible to avoid the constraints and discipline that municipal bond markets exert. Unfortunately, that’s a problem without a clear solution, but at least this book can offer some clear lenses with which to look at this as a structural issue.
November 28, 2024
While Jenkins' underlying thesis seems reasonable and important, this book suffers badly from the failings of a certain type of academic writing: the lack of a clear introduction to the basics of the topic, a heavy focus on one specific case (San Francisco) without doing enough to make it clear if it actually generalizes, and perhaps too much of a focus on the details of the topic without the surrounding context: e.g. the author assumes knowledge of how interest rates changed over the course of the 20th Century without explicitly stating the pattern or attempting to explain it. In addition, for a book with such a fundamentally quantitative topic, the absence of data tables seems a major failing.
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November 27, 2021Considering I know absolutely nothing about finance, this was an excellent read. Jenkins's use of the archives, coupled with a rich story arch highlighting the city of San Fransico, bankers, and citizens made it easy to follow. Jenkin clearly outlines how city planning and investment in the white middle class led to the failure of San Fransico during the mid-1980s. Even though the story focuses on one city, it offers insight into how this narrative resembles other cities and places.
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May 12, 2022not going to say too much about this because i work on the very edge of the municipal bond market, and i don't want to get myself in trouble, but an interesting if dry critical take on municipal bonds. no opinions from me on the argument for the aforementioned reasons, but it was fascinating to read about how these bonds have evolved over time and the power the bond market has over municipal officials (though from my very limited experience with the creditors, they may disagree...)
December 2, 2024
i always enjoy a book that allows me to go “oh so ~that’s~ why that’s like that”
i have a hard time parsing through financial jargon and economic terminology, but this book made it surprisingly simple and easy to understand. thank you dr jenkins for giving me ammunition to dunk on economic finance bros everywhere 🫶
i have a hard time parsing through financial jargon and economic terminology, but this book made it surprisingly simple and easy to understand. thank you dr jenkins for giving me ammunition to dunk on economic finance bros everywhere 🫶
November 23, 2025
very good and very essential read. i didn’t really know much (or care to know much) about municipal politics and finance before reading, so this cleared up a lot for me in terms of understanding how cities are dependent on and connected with large-scale financial markets and consequently macroeconomic policy. It also makes the case for a ‘fiscalized’ Fed or a renewed Reconstruction Finance Corporation much stronger - both for the ends of a Green New Deal and for achieving racial justice.
August 4, 2021
Good read if you're into muni bonds and history.
December 28, 2024
I know muni bonds from a trading perspective and it’s eye opening to learn about the society impact side of them as well as the deep structural inequality that came with it.
Displaying 1 - 16 of 16 reviews