Community discussions

Path to Failure

by Tracy Marisa, Tom Reynolds, & Henry Kramer.

January 6, 2012

At the Southern Tier Regional Economic Development Council program on September 29th, we had the opportunity to look at the projects being pursued. The theme was “New York is Open for Business.” Sadly, the agenda being pursued will leave New York firmly shut.

The official purpose of these regional economic councils is to work out a plan for economic development. But, the essential direction of the councils will produce a plan that undercuts their goal. Central planning is not what New York State needs; we need less government planning and a reduction in the role of government.

New York starts in the race for jobs with two strikes against it: one of the highest total tax burdens in the nation and excessive regulation coupled with bureaucratic administration. These are the problems that need to be addressed.

The composition of these councils also demonstrates a failure to understand how to achieve economic development as a majority of their members are drawn from academia and government. To woo any business to New York, we need to ask: what are the needs of the business? Simple marketing suggests the businesses are the ones best equipped to establish that formula, not university professors or government officials. New York still acts as though potential businesses are applicants to be put through a bureaucratic wringer, rather than customers the State must satisfy.

A better alternative is a private sector task force, comprised as the Grace Commission was during the Reagan administration, of loaned executives from management. It was put together without any government money or control, but government offered cooperation and access. The central question for such a group would be, “What do you need to consider bringing jobs to New York?”

The councils are charged with economic development. They were created for this purpose. They are not, and should not be, environmentally centered. That is what the Department of Environmental Conservation does and should do. Any human activity has to balance risks and rewards. The councils establish the rewards related to a new business and the DEC evaluates the risks.

Energy development is the only significant near term game changer for jobs and the economy. Yet, in an act of political cowardice, the Southern Tier Council has declared “neutrality” on energy development to avoid angering politically active anti-development groups. To turn its back on these opportunities is to take off the table the only significant prospect for economic growth. It is the DEC, not the Council, that must ensure the safety of development. By doing this, the Council has virtually doomed itself to produce words, but few jobs.

The various working groups that the Council has established are out of touch with its mission. Emphasizing downtown development, solar energy, or short line railroads will not solve New York’s basic and fundamental barriers to rapid and real job growth. These are the elements of a social and political agenda that will turn off private sector decision makers. States that successfully compete with us pursue different policies rooted in hands off government. These governments do not expect business to pay the tab for their social agendas. Those states which have been relatively successful in growing jobs do not think or act like New York.

American workers are very productive but our high wages and benefits make it difficult to place jobs in the U.S. We are in international competition for jobs. Whether or not this is “fair” is immaterial, as it is a fact. We need to seek ways to demonstrate the productivity of New Yorkers outweighs the cost.

New York can change and do what is necessary for economic revitalization or it can freeze on its current course. If it does the latter, no council will be able to reverse economic decline. We need a change of direction but that means asking those we want to add to our economy what they want, not what we, academia, or government want.