The confrontation Drew Carey and Nick Gillespie clash with the Cleveland City Council over Reason Saves Cleveland.

• Position: Discussion

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IT'S NOT EVERY DAY that entrenched politicians in a decaying city confront libertarian ideas about turning their economy around. But that's exactly what happened on May 28, 2010, when the Cleveland City Council reacted to reason.tv's groundbreaking documentary series Reason Saves Cleveland (reason.w/cleveland) by inviting its hosts, native son Drew Carey and Ohio resident Nick Gillespie, for a wide-ranging discussion about philosophy, governance, and the borderline between perception and reality.

Part photo op, part brainstorming exercise, and part angry rebuttal, the debate revealed worldviews that were not just ideologically incompatible but factually contradictory. Yet the two sides facing off across a narrow table also had to deal with having their usually unrebutted arguments thrown back at them by extremely knowledgeable and emotionally invested opponents.

The result was nearly three hours of flying sparks, defensive filibusters, and some of the best libertarian comedy this side of Penn & Teller. The following is an edited transcript.

City Council President Martin J. Sweeney: This table's full of people that care about the city of Cleveland. You care about it, and you have your own opinion. We're going to talk about how we can improve the place you were born in, we were born in, and we're responsible for taking care of. What's the most important thing you would recommend we focus on?

Drew Carey: The most important thing to me is cutting red tape and making Cleveland more business friendly. I'm a Price Is Right host, so I'm not an expert on urban policy; that's why I went to the Reason Foundation and asked them to do the documentary. But I think the goal for Cleveland should be to be the No. I business-friendly city in the country. Not to be better than we were last year, and not to be better than Brookpark or Solon or [other suburbs of Cleveland]. I think when somebody comes in from anywhere in the country and they think, "Well I want to start a business," they should think to themselves, "I want to go to Cleveland, because that's the best place to go"

We used Houston as an example. I think we should steal their ideas and just put them in place. The more business-friendly Cleveland is, the more jobs come in here, the more tax money we have, the more money we have for police and schools and all that stuff. It all starts with a business climate that's conducive to people wanting to come start a business here.

But it takes a tradeoff, because when you get rid of the red tape and the regulation, you have to put up with people doing what they want. Sometimes, some of the things they do you might not agree with.

Nick Gillespie: In the video there's a moment when we talked to a city councilman. He's not here today, so we won't name him, but he's a good guy; he's working to make the city better. He talked about helping a company that wanted to expand its operations a few years ago. He said they've been trying for about a decade, and that he was very proud that with his help they got it all done in 18 months. That's just not good enough.

It comes down to rethinking things like zoning, which traditionally is seen as a tool for protecting people, but in fact is always a way of paying off certain interests that already exist. Cleveland is a very heavily zoned and regulated area in terms of land use. Many of the designations go back to the industrial era, or even the pre-industrial era. It's probably time to think about that and try to simplify what kind of licenses, what kinds of zoning, what kinds of approvals you need before you can get into the really tough part of running any business, which is actually competing against your competitors.

Councilor Phyllis Cleveland: I think we're all in agreement on the things that are not working, or not working well enough, in our city and other cities like ours. Our infrastructure, our school system. Of course the difference is how do we approach those things?

I agree to some degree with a lot of the things that you're saying, that we need to do better. I agree that we need to be more business friendly. Not necessarily that we need to be the most business friendly, because as you said, we're giving up something on the other side. And I represent communities of people who don't have access to the halls of power, the businesses, the capital, and the things like that, because of the conditions they were born in. There's got to be a balance. Just going to the zoning issue, I was on the Stossel show that you did.

Carey: The line you said that I remember is that you don't want to have a strip club next to a church.

Cleveland: Next to a day care center or a church, exactly.

Gillespie: That would make Sunday a lot easier, though.

Cleveland: I don't know about that. Not in my community.

But just following that train of thought, you mentioned somebody coming in and setting up a business.

Again, I'm looking at it from the community I represent.

And it happens all the time, we have people who come in, people who have the capital to open stores, and they're doing what they do naturally, looking at what's in their best interests, what makes money quick. And we end up with liquor stores and the low-end types of things. They may create a few low-paying jobs here and there, but they tend to create more problems in the community than they solve. So I think there's got to be a balance there.

I think there's a perception that things don't work in this city, and I think a lot of that is just perception perpetuated by the media and by others.

Gillespie: If you look at the economic literature, the urban development literature, the fears that zoning is designed to address--the strip club or the charnel house next to the residential neighborhood--these things actually don't come up that often. We worry about those, but they don't make economic sense, so it doesn't happen absent regulation.

Go visit the cities that have fewer land-use regulations, and see what kinds of odd things happen there. And you'll find actually that land use patterns in a place like Houston are basically identical to places like Cleveland. What is different is that the cost of doing business is dramatically lower in one place than the other.

And this is not peeing in the punch bowl or anything. Cleveland has many good things going on, but it is in a long-term economic decline that has reached a crisis situation. It had been as high as the seventh largest city in the country; it is now the 41st largest. There are less than half the number of people it had in 1950. It lost 10 percent of its population in the decade of the '00s. It has lost many of its jobs, and they're not coming back. I mean, this is something that needs to be addressed. How do you turn this city around? You can't say, "OK, it's not as bad as it was two years ago." It's got to be, "How do we make it better tomorrow?"

Councilor Kevin J. Kelley: I would ask you to respond to this assertion: From a 30,000-foot view, you take very complex problems and apply very easy-fix solutions. And some of the anecdotal examples aren't on point with the...