This is an interesting idea in principle but how would one implement a city-state in a modern context? In ancient times Greek city-states like Sparta and Athens either had a standing army or well trained citizens ready to go to war quickly. Hong Kong was never independent, they were a British colony for years and years. For a modern city-state to work today IMO it needs to have access to water, vast lands for agriculture to feed its people, and the ability to defend itself without the need for outside help. Perhaps Singapore is a better example of a modern city-state.
I think he was saying force NYC, SF, etc to become their own city-states. Essentially kick them out of the coutnry.