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An old Cherokee is teaching his grandson about life. "A fight is going on inside me," he said to the boy.

"It is a terrible fight and it is between two wolves. One is evil—he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego." He continued, "The other is good—he is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion, and faith. The same fight is going on inside you—and inside every other person, too."

The grandson thought about it for a minute and then asked his grandfather, "Which wolf will win?"

The old Cherokee simply replied, "The one you feed."

First People - The Legends. Cherokee Legend of Two Wolves. November 16, 2004. [accessed April 7, 2012].

Sunday, January 29, 2012

In Prince George's County a Little Economics is a Dangerous Thing

               Everyone is interested in economic development in Prince George's County, Maryland, and some even have an interest in economic development for Prince George's County.  But what is this thing we call economic development? Why do so many care about it, and why is it so important? Broadly defined, economic development is a  hopefully positive change in the level of production of goods and services by a community over a ore-agreed-to period of time. Economic growth either up or down is a function of the dynamics of  development.  Economic growth from development processes is usually brought about by technological innovation and positive external forces.[1]

               The engine of economic growth is the development of local businesses (firms) that are entirely dependent upon external or non county opportunities and factors. The identification of this economic base is definitionally part of :... the oldest, simplest and most widely used technique for regional economic analysis." in economic theory.[2] It is important to bear in mind that while the retail sector is a crucial component, it is a member of the non-basic economic sector that is composed of businesses and organizations which depend for the most part  upon local business conditions such as the size of our wallets and therefore the size of the federal budget.[3]  This is a direct reflection on the lack of focus on generating products and services in the private (basic) sector so that national and international markets would have to come here and leave their money here in Prince George's County.

               We need to find the political will to enable economic development strategies, policies and outcomes that firmly recognize that our economy will be strongest when it develops those economic sectors that are not inextricably linked to the local economy. Prince George's County needs to encourage, entice and enable business development that relies first and foremost on external markets.  A local economy wholly dependent upon local factors will have great trouble responding to economic down-turns as we can see firsthand. An economic development strategy of real-estate and construction only may be a tactic, but cannot be the end-all mechanism for long term growth.

               Some may say that Prince George's County is committed to development guided by the economy, the environment, and growth with equity. History tells us otherwise. Since the time of County Senator and later US Congressman Sasscer in the 1930s up to the present, development has been mostly about maximizing the sales  price of open space and generation of short term profits for the construction industry resulting in the creation of homes and retail service employment opportunities.[4]   The Sasscer political organization was far from unique for, in the 20th century, most Americans moved to cities, and the new form of properties ordinary people accumulated were their houses.

               Because property and the structures on it (real estate) were the fundamental engines of wealth creation, political realities compelled  responses that began to direct government to subsidize that property in the form of low- or no-interest mortgages and tax deductions for interest payments and to instigate policies,  plans and regulations which encouraged and enhanced property owners' equity positions at the cost of the needs,  concerns and demands of the greater community. Simply put, the demands and expectation of the few were and are met at the expense and needs of the many. So we do the least amount to maximize the greatest profit letting future infrastructure costs and neighborhood problems to be paid for by others tomorrow.

                We need to dream a little to get big things. We need the political will to imagine international technology markets that need the science already generated right here4 right now. Unlike many communities we do not need to go find the research; it has been right here in our backyards for over a hundred years waiting for us to take advantage of the opportunities of the 21st century.              

[1] InvestorWords. economic growth, Definition.  Copyright©2011 by WebFinance, Inc. ALL RIGHTS RESERVED. [accessed January 28, 2012]

[2] Florida State University, Department of Urban and Regional Planning - Planning Methods III: Forecasting.       
Economic Base Theory.  2004. [accessed January 29, 2012]

"For example, Boeing builds and sells large airplanes to companies and countries located throughout the world. Their business is dependent almost entirely upon non-local firms. Boeing does not sell planes to families or households locally, so their business is very much dependent upon exporting their goods. Manufacturing and local resource-oriented firms (like logging or mining) are usually considered to be basic sector firms because their fortunes depend largely upon non-local factors, they usually export their goods."

[3] ibid.

"For example, a local grocery store sells its goods to local households, businesses, and individuals. Its clientele is locally based and, therefore, its products are consumed locally. Almost all local services (like drycleaners, restaurants, and drug stores) are identified as non-basic because they depend almost entirely on local factors."

[4]  Julian Gross, Greg LeRoy and Madeline Janis-Aparicio. Community Benefits Agreements, Making Development Projects Accountable.  © Copyright 2005 Good Jobs First and the California Partnership for Working Families. All Rights Reserved. [accessed January 29, 2012]

"Therefore, while economic development projects are often heavily subsidized by taxpayer dollars, they produce decidedly mixed results for city dwellers.While many of these projects bring sorely needed jobs and tax revenues back to areas that have been disinvested, there is usually no guarantee that the “ripple effects” of the projects will benefit current residents. Many new developments cause inner-city gentrification, pushing out low-income residents as housing prices rise. Other projects create large numbers of dead-end low-wage retail and service sector jobs, leaving low income, families, mostly people of color, mired in an endless cycle of poverty. While some Smart Growth proponents have advanced the notion that development should be governed by the “Three E’s”—the economy, the environment, and equity—few if any jurisdictions have pursued “growth with equity” policies in a systematic way. Consequently, even after investing billions of dollars in economic development, metropolitan regions continue to experience spiraling poverty, sprawling, unplanned growth, a crisis of affordable housing and declining quality of life for low and middle-income communities."

1 comment:

Cindy said...

Excellent point about retail development depending on local economy, sucking money out, rather than bringing money in. I will note however that Tanger in Riverhead, NY is a tourist destination.. a Hilton Garden Inn has sprung up right across from it.. To be fair, a water park is also nearby.. See what there is to look forward to?

Research of course is a much better idea..Brookhaven National Labs is one of our best local well as bringing prestige & dignity to our area.