Thursday, December 8, 2011

Or wish-lists?

Plans and Lists


US lobbyists, Chinese five-year plans

The international consulting firm McKinsey & Company sent a note out to its corporate customers this past summer, urging them to sit up and pay attention to China’s new five-year plan. McKinsey looked at the potential impact of Chinese government policies on 33 industries, and recommended likely winners for foreign investors. China’s leaders want more urbanization, greener energy to replace their horrific dependency on coal, more public transportation, more consumer goods, and “greater social harmony.” Their 12th five-year plan “targets a 13 percent increase in minimum wages each year, along with a more modest annual increase in household income (about 7 percent).” China will avoid inflation because costs will probably increase as a result of new policies for pricing energy, raw materials, and water; tighter environmental regulations; and enhanced consumer protection, and their soon-to-be-richer consumers will just have to pay those costs. And along the way, the Chinese planners unapologetically plan to “incubate” (i.e., subsidize and protect) technologies that have the potential to become “national and global champions,” specifically in alternative energy.

Back home in Buffalo, we have plans, too. Western New York’s Regional Economic Development Council just last week submitted its recommendations to Governor Andrew Cuomo for $74.5 million worth of projects that have a lot in common with the Chinese plan. The council’s wish-list is about intellectual capital, green infrastructure, urbanization, and helping low-skill workers become higher-skill (and presumably higher-wage) workers.

But there was another wish-list or plan released here in November, the one by the lobbying group called the Buffalo Niagara Partnership. Although the staff of the Partnership was included in Cuomo’s Regional Economic Development Council, the Partnership came up with a very different list of projects it wants government to fund. The Partnership list doesn’t have an overall price-tag, like the council’s list does. The Partnership list doesn’t present any discussion of regional population dynamics or income trends or industry analysis, as the council list does, and as do the documents that any city or county or other government entity provides whenever it goes to Wall Street seeking to borrow money for a specific piece of infrastructure. Instead, there is a seven-page list of projects, some with price-tags, some without, and there’s no context, and precious little explanation. Some of the Partnership’s “regional agenda” asks are huge: There is an ask for “gubernatorial approval of the plan to relocate the UB School of Medical and Biomedical Sciences to the Buffalo Niagara Medical Campus,” which is at least a $350 million project in construction costs alone. (The intellectual capital that the UB medical school needs is not addressed at all.) The Partnership regional agenda list is rich in other site-specific details for some speculative projects, too. There is a $2 million ask for an agribusiness park “that can be marketed for value-added food preparation and processing projects.” There is a $3 million ask for an “complete infrastructure build-out” for the North Youngman/Riverview Industrial Park “to make these sites shovel-ready and attractive to potential solar technology production projects.” That particular ask was released in Buffalo even as Republicans in Washington slammed the Obama administration on solar-technology producer Solyndra, which defaulted on a $500 million government loan, largely, most say, because government-subsidized Chinese solar-technology producers have become completely dominant in the growing world market for solar technology. What’s striking about the Partnership request for $3 million for a specific site for this specific industry is the global context, and the lack of detail as to why $3 million will do something here for a yet-to-be-named producer when $500 million wasn’t enough for a producer with a factory, capital, staff engineers and staff scientists, and the endorsements of two US presidents.

The two Buffalo plans that were put forth in November have been put before the region’s elected officials just a few months after the Partnership hosted a two-day Accelerate Upstate conference, which also produced a document with eight broadly drawn recommendations that it called an “action agenda.” That agenda—which included non-controversial items like calls for more venture capital, better coordination of workforce-training programs, and better Upstate-Downstate coordination—were framed in the positive, unlike the harshly negative rhetoric of the Partnership’s “Unshackle Upstate” campaign. One of the items on the “Accelerate Upstate Action Agenda” is this statement: “All levels of government in both Canada and the US must work together to protect, and create industries around, one of Upstate’s most attractive assets—the fresh water resource of the Great Lakes.”

Curiously, there is not a word in either the Partnership 2012 “regional agenda” nor in the Western New York Regional Development Council report about that particular issue. In August, the Great Lakes Restoration Initiative, water quality, the crisis of combined sewer overflow, the toxic algae blooms in Lake Erie, the fish tumors in the Buffalo River, the four billion gallons of raw sewage that flush into the Niagara River, and other component issues underlying the Accelerate Upstate Action Agenda were under discussion in Buffalo. The document that cited “Fresh Water” as one of eight action items was released not sometime in the 13th century in a language other than English, but rather only a few months ago, in Buffalo, by the same people who participated in producing both the Partnership and the Council lists, which overlap on several items. But not on this.

Plans, lists, and anti-planners

The Partnership endorsed Chris Collins, the county executive who vetoed legislation to create a countywide planning board. The Partnership has a history of actively undermining regional governance initiatives, including the Greiner Commission’s plan, which endorsed former Erie County Executive Joel Giambra’s administration’s plan to create a Buffalo version of the “unigovs” that run Indianapolis, Nashville, Hamilton, and Toronto. There are six industrial development agencies in Erie County today in large part because the Partnership has consistently thwarted efforts to unify them.

Nobody has bothered even to attempt a campaign to unify the 28 school districts in Erie County into a single countywide school district, with regional resource-sharing, which is the system that has succeeded so admirably in places like Raleigh, North Carolina, specifically because concentrations of poverty are broken up by regionalization.

The Buffalo metro area still has three cities, 25 towns and 16 villages, plus three separate water utilities, six sewer districts, 19 separate police forces, 26 public safety answering points (Monroe County has one; New York City has one; Los Angeles has one), and dozens upon dozens of special districts—all for an area that has shrunk from 1.1 million in 1970 to just over 900,000 today. Regionalization and consolidation, regional planning and regional thinking, are disempowered here because the Partnership opposes them.

By 2025, the population of Erie County—including Buffalo and all those towns and villages—will be about 800,000. One would think that, given the prospect of further regional shrinkage, someone in leadership, in business or in academia or in elected office, would sense the urgency of making a plan to deal with the fact that fewer taxpayers will be left to foot the bills, just as the Chinese sense the urgency of making a plan to cope with a rate of economic growth Americans can only fantasize about.

The current crisis in funding the metro Buffalo regional transportation system, which moves low-wage workers and students on the buses and trains, and high-income travelers and Canadians at the airports, is only the latest warning sign about the consequences of bad planning—or, more accurately, of inadequate, uncoordinated planning. Apparently, the Buffalo metro’s economic thinkers are oblivious to the current reality that oil prices have once again topped $100 a barrel, and are projected by responsible energy analysts to rise to $150 a barrel over the next few years. Therefore, there is a need to do infrastructure planning such that workers can get to work other than in oil-powered personal vehicles that many can’t afford today. What is the point of asking New York State to fund moving a medical school and building speculative industrial parks for yet-to-be-identified industrialists when the transport system for workers and students, which will need retooling anyway, is in a jam?

Where, in short, is our version of the Chinese five-year comprehensive plan for energy, water quality, transportation, worker training, increasing the minimum wage, and what they call “social harmony”?

The plan is to have a plan

The answer, of course, is that we won’t have one. Americans lack the cohesive leadership class that understands the concept of national purpose the way that Chinese, Russians, Brazilians, and even Canadians understand it. Our WASP aristocracy has long since given way to the hegemony, both cultural and political, of the Wall Street speculators and oil-industry thugs who are deal-focused and globalized. While the Chinese build bullet trains on a quick-step, and muscle their solar-energy and wind-turbine technologies and products into the global market, our financial and petroleum elites fund a message machine with roots in the anti-regionalism of the Kennedy School of Government at Harvard, and in the right-wing fever-swamps of Washington and in the Republican Party, that promote an anti-planning creed. They ever cite the gospel of economist Friedrich Hayek, whose anti-modernism seemed bizarre and even pathological to his contemporary John Maynard Keynes.

That doesn’t mean, however, that we should throw our hands up. Public money will continue to be spent. The question is not whether, but how, and to what effect.

That’s why the August work of the Partnership, and the November work of the Regional Development Council, should both trump the latest Partnership regional agenda—the one that mixes all sorts of unexplained and unpriced mega-asks of government with the sensible thinking of the far less grandiose, much more contextualized thinking of the Regional Development Council. The Partnership asked lots of the right questions in the summer, but gave many irrelevant answers in the fall.

Let us not, however, forget some of the fundamentals that neither of these groups adequately addressed. First, there is no regional or even countywide planning entity here, and there needs to be one. Second, the regional workforce’s transportation needs, current and future, cannot be addressed by reducing the NFTA’s petroleum-dependent services today when those services need not only to be enhanced, but to be re-based on an energy source that won’t skyrocket in price and, preferably, that can be produced within the region. Third, the water-quality question that the Accelerate Upstate Action Agenda asked in August needs to get back on everybody’s agenda. Fourth, the best defense against expensive decline is for the region to reconvene at its core, where the unit cost of basic services, from libraries to parks to transport to utilities, will always be smaller than where people are spreading out, farther and farther from one another.

Urbanization, environmental quality, green energy, and efficient public services—all of these should be achievable for our region without asking the Chinese Communist Party to come in and run it for us. A better aristocracy than the one we’ve had, however, would probably be useful, and a few elected officials with the will to stand up to the speculators and petrocrats would help too. But without some enduring regional framework that can outlast individual personalities, or some public, transparent structure that can actually govern with a long-term, integrated plan that addresses energy, environment, transportation and land-use, we will have a new plan every couple of months, and lots of little school districts and municipalities and police forces and PSAPs, and dirty water, and a shrinking tax base.

Like now.

Bruce Fisher is former deputy executive for Erie County and currently visiting professor of economics and finance at Buffalo State College, where he directs the Center for Economic and Policy Studies.