Government and Job Creation

So I was walking downtown near the Reading Terminal Market with my boss, talking politics no less, when who did we bump into but Lynn Swann.  Yes, the Republican gubernatorial candidate was in town to shake hands and get the message out.  Combined with a conversation I had with a friend over coffee earlier this morning, it got me thinking about my view of government and job creation, a particularly relevant topic with our state's upcoming election.

"Fast Eddie" Rendell is the consummate dealmaker, and a darn good one at that.  And a state surplus this year means money for deals.  So he's canvassing the state with big checks (both literally and figuratively), and Pennsylvanians from Erie to Philly are glad for the money and jobs those government funds mean for their communities.

Never mind, of course, that a lot of those jobs are in industries that were once vibrant but that are now well past their prime.  Pennsylvania is a good Rust Belt example, dotted as it is with countless communities that once depended on big plants that mined, processed, and made stuff for their jobs and wellbeing.  Industry shifts, of course, and other macro-economic forces have shrunk most of that business.  And yet we're still trying to prop up old economies and Old Economy businesses. 

And who can blame the politicians, from Fast Eddie on down, for going this route?  After all, it's a merciful thing to help a person, a family, a community to retain its livelihood.  Investing in a business or in upgrading its machinery is a tangible thing, as is a job saved from the cutting board.  People tend to remember these things when they close the curtain and stand in front of the levers.

It may the merciful thing to do in the short run, and even in the long run, and it may even be the economically prudent thing to do in the short run.  But in the long run, the state falls behind other states in terms of producing, attracting, and retaining the kinds of businesses that can grow and create jobs as a result of that growth. 

I'm not just talking about pitting Old Economy against New Economy, either, since manufacturing is still alive and well in the USA.  But too many deals to prop up dying businesses and dying industries for the sake of dying communities can make a state lose its competitiveness amongst its peer states. 

Better to retool people through training, improve education (which attracts productive newcomers AND makes existing residents more productive), and create a business-friendly environment (i.e. through lower taxes and/or public amenities that help businesses).  This is the Republican way of juicing an economy (not the shopping spree you've seen over the last few years by the Republicans in Congress).  And from what I've read about Swannie, this is how he views things: government isn't for creating jobs, but for creating the environment in which businesses can create them. 

You may not agree with me here, and even if you do, there's no guarantee that Swannie can, if elected, actually make it happen.  But it's definitely not the way Fast Eddie thinks when he thinks about government and job creation.  Think about that when you go to vote next month.  

PS I suppose I should backtrack a tad here: 1) you have to do some deal-making, and so the fact that Fast Eddie's good at it is certainly a plus for PA, 2) some of his deal-making has been quite good in terms of moving the state into a more competitive position in the New Economy, 3) he did turn Philly around, so you gotta give him a halo effect there, and 4) you might be just as correct in saying the bad deal-making I slam above is due to the state legislators on both sides of the aisle as it is to Fast Eddie. So don't ignore what I'm saying here, but don't take it as a total Rendell bash either.
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