Economic policy orthodontics

Imagine running a city government like San Antonio with an annual budget of $50m for economic development, whose basic definition is ‘any business activity’. Imagine the largest federal assistance programmes funding 84 economic development programmes, amounting to tens of millions, having no common definition, and no useful evaluation of outcomes. There are 52 entrepreneurial assistance programmes costing $2bn, fragmented and inefficient.  These efforts are like toothpaste, offered in measured portions, with only cosmetic value. Economic orthodontists need not apply.

Such is the state of affairs in our times, with no real hope of enlightened professionalism.  This practice is pervasive.  Planners managing or influencing major policy, programme, and assessment funding still equate business development activity with economic development strategies, goals, and expectations, which clearly are not one and the same. Paradigm shifts take a long time; the current one is 40 years old.

If one sees our community as a body politic, does repair of a broken arm really contribute to a healthy body? Does medication for high blood pressure alone make for a healthy patient? I observe that our diagnosis falls short of our true needs, if indeed we are concerned about the overall health and safety of communities in need, given that those who are charged with health assessment focus on reacting to needs rather than getting in front of them as much as possible. Rather than being forward and backward leaning, we are flat-footed.

Simply put, economic development is not practiced in the U.S.  What is practiced can honestly be described as Chamber of Commerce commercial development, which accommodates business interests for the sake of ‘growth’ and ‘development’, to the joy of public and civic officials, at great public expense in the form of abatements, exemptions, subsidies, and write-offs.  All of this enormous cost is done in the name of ‘free enterprise’, yet the public pays the tab, and gets stuck with the bill when private partners leave town in the middle of the night.  Our compliant press records the ceremonies and extol the virtues of ‘public-private partnerships’ and ‘private sector economic development’.

There is one problem:  there is no such thing as ‘private sector economic development’.  The ‘economic development’ term is a public sector term, and all that it implies.  The private sector has intruded into the public coffers so long and so extensively that they believe they belong in the driver’s seat in public administration.  This practice has occurred due to poor professionalism: public officials and planners are more greatly responsive to the interests of the private sector than to their citizen constituents. When public hearings are held as required by law, key assumptions and policy decisions have already been made; the unsuspecting public is left with window dressing, and little time on the clock to honestly engage.

Just like at the federal level, public officials serve a few years then join the firms they monitored, and vice-versa.  The revolving door is an apt metaphor to illustrate why it is that the status quo drags on like a wet towel, as citizens have no real clout to effect broader and deeper outcomes.  We see large amounts of public funds committed but we do not see a commitment to reduce poverty rates from 20% to 10% in five or ten years.  We do not see community banks lending at reduced rates or tackling endemic crime in distressed areas.  We don’t see a sincere effort to promote small business, women-owned, or minority contracting; we don’t see favoured commercial interests willing to hire from low-income areas, or to train them for livable wage positions.  No, this is socialism, and we can’t have government interfere with the virtuous marketplace and free enterprise.  Don’t mess with our religion or our principles. In Texas, a very popular public signage and bumper sticker reads: ‘Don’t Mess with Texas’.  Don’t mess with the status quo.

There are alternative scenarios alive throughout our country, within and outside the mainstream structures.  Creativity and innovation thrives, out of necessity, sense of community, and social justice. President Obama’s re-election efforts are geared to motivate grassroots activism, voter turn-out, and as a catalyst to move forward.  With apathy and personal hardships as obstacles, his campaign will meet with limited success, but enough I believe to defeat a poor opposition candidate who presents a narrow and superficial view of the world, favouring the 1%.

Yet, be fore-warned: we usually experience an ‘October surprise’, manufactured bombshells timed to turn the tide during the latest news cycles, leaving no time to learn the facts.  Apart from this, we also have three debates which will bury one candidate or the other, among those in the 5% who still haven’t made up their mind.

Outside the structure, we’ll see the rise and expansion of the ‘New Economy Movement’, animated by activists, theorists, organisations, and engaged citizens to ‘re-build the American political-economic system from the ground up’.  Here we will see hands-on activity seeking a range of economic models in ownership and ecological outcomes.  Worker-owned coops, solar installations, LEED – (Leadership in Energy & Environmental Design) certified buildings, hydroponic greenhouses, organic dairy production, ‘socially responsible’ sustainable small businesses, “B” corporations designed to benefit the public, municipally-owned utilities, credit unions, and land trusts, Community Development Corporations, ‘responsible banking’ ordinances, ending corporate personhood, and putting  worker, consumer, or environmental respresentatives on corporate boards.

New theorists are stressing the implications of ending economic growth, calling for the restructuring of the entire system and building from the bottom up. Elinor Ostrom, a 2009 Nobel Prize winner, was awarded her prize for her work as a ‘commons’-based development form of economics model.  For a greater review of this ‘new economy’ movement, check out  www.commondreams.org. I credit Mr. Gar Alperovitz for his Democracy Collaborative material and the examples cited here.

Inside or outside our economic system, we all can make a meaningful contribution in economic orthodontics in the years to come.