THE NEXT BEST THING, CONT.

Posted in Rants on November 21st, 2016 by Ed

So, I don't do this often but yesterday's post and its Facebook cousin spawned an unusually large number of useful comments. I thought I would follow up by addressing two of them here.

First, there was criticism of the idea of writing off a lot of rural and remote urban areas rather than reinvesting in them. That sounds good, but it fails to account for many of the reasons these places were 'de-invested' in the first place. Who exactly is going to do this investing now? We're talking about places that suffer from poor location, poor quality of life, urban decay, poverty, and a potential workforce generally lacking in relevant skills. What exactly is going to bring investment to Decatur, IL or Muncie, IN when there are better, more convenient locations nearby like Indianapolis or Chicago? The company executives don't want to live in the middle of nowhere with a workforce riddled with problems ranging from low skill levels to the associated negative side effects of poverty (crime, drug abuse, lack of support networks, etc).

Tax cuts and incentives, right? Just offer enough tax cuts and incentives that some business will want to locate there. Again, that works in theory. The problem in reality is that you can throw a dart at the U.S. map now and hit a location where state and local officials will shower you, a potential employer, with free public money in the form of incentives, rebates, breaks, and infrastructure improvements. The Decaturs of the world have no competitive advantage. The company can get the same lavish treatment from vastly better locations, particularly in the South. Tax incentives are kind of a collective action problem; if a few places offer it, then it achieves the desired goal. If everyone does it, everyone loses.

The economy as a whole has enough problems across the region that a business could reap plenty of freebies locating near Chicago, 20 minutes from the world's busiest airport, 45 minutes from Lake Michigan shipping, and with a college educated or otherwise skilled workforce numbering in the millions to pick from. Oshkosh and Anderson and Lima can't compete with their nearby, economically stronger neighbors. The only businesses left in the more remote Rust Belt outposts are only there because elected officials throw such an insane amount of public money at them – far beyond any amount that makes economic sense – that it would cost more to leave Moline than to stay. The incentives game is an arms race, and eventually the smaller players have to go nuclear to "win."

Could the government be The Investor? Say, investing massively in infrastructure in these areas to give them a boost? In theory, yes. The political will to do so appears to be lacking, and the rational case for building up the infrastructure of economically dying places experiencing population aging and decline really need new roads and bridges. From the point of view of an elected official, this will have the odor of a Dig Hole, Fill Hole project. A new highway isn't going to bring Youngstown an economic revival, so falling into the trap of investing in new infrastructure continuously just to keep the place afloat is a real danger. Of all the proposed solutions, though, this is probably the most realistic. It has at least some chance of happening, although it remains unlikely with Republicans in control of Congress.

The second major point was that a revival of pro-labor, anti-Capitalist Greed rhetoric once held great appeal to the white working class and could therefore be a viable strategy moving forward. All I can say is…it's possible. It's not IMpossible. It's very difficult to see how that idea takes root at this point, though. The culture wars, the free markets = free people delusion, and the general lurch toward the right over the past three-plus decades are pretty firmly entrenched. We are at the point where the two "sides" of the political debate aren't even speaking the same language and have their own versions of reality.

There aren't enough young people in the most troubled Rust Belt areas to make that work, in my view. I may be wrong. But one of the worst problems the region deals with is the continual skill drain. Young people and people with marketable skills or motivation get out as soon as they can, and the population left behind is largely older, poorer, less skilled, and more resistant to change. As I understand it, building a labor movement relies on turning workers into activists for their own self-interest, and that's hard to do when you bring the idea to a city full of laid-off ex-assembly line workers in their mid-50s or older. I don't know – perhaps the world's greatest orator, leader, and organizer is out there and can find some way to pull that off. He or she will deserve all the praise that follows from accomplishing that. But I think a very natural impediment to labor organizing in these already severely depressed areas is that a lot of the younger workers who would be most involved in the movement are gone, long since having loaded up the moving van and headed somewhere less bleak.

In any event, the comments on this one were unusually numerous and good. I know defeatism is not a popular ideology, and it's possible that I project way too much of my own take on living in one of these places from experience. That said, I don't think the optimistic view can fail to account for the limitations inherent to the ideas mentioned here. It could work, but it's awfully easy to make the Devil's Advocate argument for why it will not.