Whitcomb: Development Delusions; An SAT Question; Kelp Company; Nuke Looks Nicer
Monday, November 19, 2018
Bob Whitcomb
The shattered lobsterpot, the broken oar
And the gear of foreign dead men. The sea has many voices,
Many gods and many voices.’’
-- From “The Dry Salvages” (referring to some rocks off Cape Ann), No. 3, in T.S. Eliot’s “Four Quartets’’
Bribery Will Get You a Traffic Jam
Boston did well in failing to snare an Amazon “Second (or is it third?) Headquarters’’. The hysterically hyped project would have overwhelmed city services; stolen a lot of tech talent from the startups that are the foundation of the region’s economic future; worsened the city’s traffic woes, and driven up already sky-high housing costs.
And it’s unlikely that Boston and the Commonwealth of Massachusetts would have come up with a bribe to Amazon’s Jeff Bezos that would have been big enough to offset Boston’s drawbacks, especially that it’s probably too small for the likes of Amazon. Despite the company’s show of looking all over America as a place for a “Second Headquarters (which of course turned out to be two “Second Headquarters’’ – New York and metro Washington, D.C.), it probably always planned to set up in cities too big to be overwhelmed by it, and with many, many techies already in residence. The apparently bogus national auction seems to have raised the bribe money that New York and Virginia, whose Washington inner suburb of Arlington, Va., won the prize, were willing to pay. Amazon says it will put 25,000 employees in each place.
Amazon CEO Jeff Bezos
New York State is giving the company a package that includes $1.525 billion in incentives, including $1.2 billion over the next 10 years as part of the state’ s Excelsior tax credit. The state also will help Amazon with infrastructure upgrades, job-training programs and even assistance “securing access to a helipad”. There’s still some confusion about the total package, but by one measurement, it works out to $48,000 per job.
Virginia, for its part, is giving the company an incentive package worth $573 million, including $550 million in cash grants – and a helipad (for Bezos’s convenience to commute to his Washington Post?) in Arlington, right across the river from Washington, D.C. The Old Dominion also pledged $250 million to help Virginia Tech build a campus in Alexandria, near the Amazon site, with a focus on computer science and software engineering degrees. Folks are still trying to figure out the precise total cost.
By one estimate in this rather confusing bag of bribes, the basic package works out to $22,000 per job. We’ll see.
(As sop to the Heartland, Amazon will also put a 5,000-person facility in Nashville, at an estimated $13,000 a job.)
So the individuals and companies already in New York and Virginia will subsidize through their taxes an enterprise that had $178 billion in 2017 revenues and is run by the world’s richest person. And, of course, it’s impossible to know how well Amazon will be doing in a decade. Might it become the online version of Sears? Nothing lasts.
Think of how much stronger their economic development would be if New York and Virginia had put the bribe money into improving transportation infrastructure, education and other stuff that would make their markets better for everyone!
And will Amazon keep its promise to create all those jobs? Don’t bet on it! Big companies are notorious for breaking employment promises. An irritating recent example:
Wisconsin, with an outrageous $4 billion subsidy, lured Foxconn, the Taiwanese manufacturer infamous for not keeping employment promises, to the state with the promise of 13,000 jobs. But the company now plans to employ only a quarter of that; much of the work will be done by robots. You can bet that Foxconn would like all of the work done by robots! One estimate is that the project works out to $500,000 per Foxconn job.
No wonder that Scott Walker, the Republican governor who pushed for this deal, just lost his re-election bid. But then, Democratic and Republican governors and mayors do these deals with enthusiasm.
The politicians know that such extravaganzas sound great, for a while, and that few citizens look into the fine print or scrutinize these sweetheart deals for their long-term macro-economic effects. And by the time that the full bill comes due, the politicians who initially got credit have moved on to something else.
Anyway, such places as tech-rich Greater Boston (and less tech-rich Providence) would do better to make their communities better places in which to start and nurture companies than to break their banks by trying to get big ones from far away whose loyalty is apt to be remarkably evanescent. That isn’t to say that Boston (which already has a couple of thousand Amazonians) and Providence (with its graphics and other designers) won’t benefit from spillover Amazon jobs from the New York operation. They probably will.
A March 2018 report by the Brookings Institution says that state and local governments give up to $90 billion worth of subsidies to individual businesses each year. How much of this is worth it? To read the report, please hit this link:
Columbus, Ohio, offers an example of how an economic-development policy delighting in diversification, encouraging local startups, and improving local amenities and infrastructure, as opposed to focusing on luring a big, fat famous company, as well as strong civic engagement by a city’s established business community, can pay off.
From 2000 to 2009, Columbus added 12,500 jobs. From 2010 to the present, it has added 158,000!
To read more, please hit this link:
There’s no cause for dismay in the report that Rhode Island high schoolers’ increased participation in SAT tests has been accompanied by lower scores. Of course: Expanding the percentage taking the test means that more kids – especially from low-income backgrounds – who take the test will lack the proficiency of the sort of middle and upper-class students of the sort who have always taken the test.
95 percent of high-school juniors took the test this fall, up a whopping 16 percentage points from a year earlier. The percentage who scored “proficient’’ in reading fell to 50 percent from 56 percent and on math to 30 percent from 34 percent. Considering the increase in test takers, that’s not bad. Now if only more of the “nonproficient’’ hadn’t failed to choose affluent parents living in nice suburban towns!
Constructing the Kelp Industry
Kudos to David Blaney, who’s starting the Point Judith Kelp Co., which, in a saltwater 2.75-acre farm, will grow a seaweed useful as a food, as fertilizer for land crops, for cosmetics and that absorbs nitrogen (which in large doses, such as runoff from lawns, can be a very bad pollutant) and carbon dioxide. In his project, he’s joining other local companies that are growing kelp.
There was a charming profile of Mr. Blaney in ecoRI News on Oct. 13. As man-made climate change warms coastal waters, some fish species will move away. It’s important that we find alternate crops that can thrive in southern New England waters. Mr. Blaney, ecoRI reports, thinks about the water eventually getting too warm for kelp. But such warmer-water plant species as Irish moss and sea lettuce are a hedge. As global warming proceeds, we’ll need all the diversification we can get.
To read the Blaney profile, please hit this link:
It’s such small enterprises that take advantage of Rhode Island’s location and other comparative advantages, that hold out hope for Rhode Island’s long-term prosperity as it tries to recover from its far too long dependence on old manufacturing industries and low-paid service jobs.
Nice Words for Nuclear Power
That the Union of Concerned Scientists, many of whose members have long opposed nuclear energy, now urges that measures be taken to keep financially troubled nuclear-power plants operating shows the increasing anxiety about global warming. Nuclear-power plants emit very little greenhouse gases.
Fossil-fuel-burning power plants would have to provide most of the electricity generation lost when nuclear power plants close. It will take a long time for wind, solar and other green energy to meet the demand. It’s a serious issue in New England, which gets more than a quarter of its electricity from nuclear power plants!
Ken Kimmell, the organization’s president, released a statement that said:
“These sobering realities {about global warming} dictate that we keep an open mind about all of the tools in the emissions reduction toolbox — even ones that are not our personal favorites. And that includes existing nuclear power plants in the United States, which currently supply about 20 percent of our total electricity needs and more than half of our low-carbon electricity supply.”
First Lady Trump
The “First Lady’’ is not mentioned in the Constitution as a federal office. No one elects such a person and nor do they undergo the advise and consent process for political appointees in the Senate. And Melania Trump, the fashion fanatic former Slovenian model and well… whose ignorance on many topics rivals that of her disturbed husband, managed to put out this pompous statement about (apparently obnoxious) Deputy National Security Adviser Mira Ricardel:
"It is the position of the Office of the First Lady that she (Ricardel) no longer deserves the honor of serving in this White House". (Honor?)
Ms. Ricardel has now been fired.
Too many “first ladies’’ have butted into matters of state that they should have stayed out of, most notably Hillary Clinton during her husband’s presidency. This should end.
Much scarier is that, after steep GOP losses in the midterms, his disastrous trip to Europe to mark the centennial of the end of World War I and other proliferating examples of Trump’s incompetence, demagoguery, viciousness, avarice and mendaciousness – okay, nobody’s perfect! -- our leader seems to be retreating into a little world of bitterness and sloth. He may have belatedly realized that his adoring followers in his neo-fascist rallies represent a dwindling percentage of Americans.
As Trump enters King Lear/Captain Queeg country, watch out!
Economist Jeffrey Sachs wrote in Marketwatch:
‘’The coming months may be especially dangerous for America and the world. As Trump’s political position weakens and the obstacles facing him grow, his mental instability will pose an ever-greater danger. He could explode in rage, fire Mueller, and perhaps try to launch a war or claim emergency powers in order to restore his authority.’’
But perhaps Queen Melania is practicing to take over.
Please hit this link to read the whole essay:
There Go Some Contracts?
Trump’s insulting and stupid trip to Europe for the Armistice Day ceremonies, and his ongoing attacks on our allies, might have at least one big economic effect on this side of the Atlantic: European governments may cut back on buying U.S. military equipment and transition to buying more from their own makers as a hedge against an increasingly unreliable America.
Blame It on the Servants
By blaming “rogue’’ agents, the Saudi monarchy diverts attention from the role of Crown Prince Mohammed bin Salman in the murder of journalist Jamal Khashoggi. But it seems clear that the prince explicitly or implicitly ordered the murder, and no smoke machine can obscure that.
Movie, Wildland
Besides drought and global warming, ever-increasing population and lax land-use oversight are leading to increasingly disastrous fires in California and elsewhere.
Char Miller, director of environmental analysis at California’s Pomona College, observed to the Los Angeles Times:
“Why is it that at the county, city, town level, we have repeatedly green-lit development in areas that we know are fire zones?
“Whether it is to allow a rock star to build on a ridgeline in Malibu or a manufactured-home community that nestles into the foothills, the decision is the same and the consequences are the same. People who have been routed out of their houses have lost their possessions, and many people have lost their lives.”
Oh, then there are those fast-growing eucalyptus trees whose resin makes them explosively flammable. Something’s gotta give.
We got this emailed note last week from old friends in Malibu:
“We are immensely grateful. Our house is standing. There is a little cluster comprised of our house and two cinderblock houses. Don’t yet know if the windows are intact. All our neighbors to the west lost their homes. About 70% of our street is in ashes. Even more was destroyed on the street above us. Have seen our island of green in the apocalyptic landscape on KTLA News.
“We are relieved but are so sad for our friends and neighbors who lost their homes. It is hard to compute.
“Our house was located in an area that had never burned.
“It was however designed to withstand fire.
“We have trees that we maintained, pruned and watered regularly. All deadwood was removed and the eucalyptus reduced by 40% a month ago. Leaf cover had just been reduced in preparation for possible Santa Ana winds. We have a metal roof, no eaves and smooth stucco walls to avoid cinders getting lodged in the structure. And hardscape all around the house.
“At this point the fire is only 20% contained. Can still see smoldering ashes in our neighborhood.’’
I hope that a movie theater hereabouts shows the new film Wildland, about young firefighters out west. Maybe the esteemed Avon Cinema, on Thayer Street, on Providence’s East Side, will introduce it to our area. Here’s a link to information about the film, including its trailer:
News Director Kate Nagle and Bob Whitcomb discuss the week on GoLocal LIVE
Greener Light for More Trains, After 2020?
Readers notice and maybe complain that I put a lot of public-transportation stuff in these columns. That’s because of its centrality in the prosperity of southern New England.
It’s good news for passenger-train expansion that the Democrats took the House in mid-terms. Such pro-mass transit Massachusetts congressmen as Richard Neal and James McGovern will be in a position as committee chairmen to push for federal aid to boost such projects as rail service between Boston and Springfield and Boston and Fall River and New Bedford. Those would ease highway traffic and wear and tear on our roads, saving taxpayers time and money, and lift our region’s economy.
It will be tough to get anything helping New England through the GOP-controlled Senate, but a foundation (or rail bed) can be laid for when the political environment changes, perhaps after the 2020 elections.
Would Trump and the narrowly GOP Senate cooperate with the Democratic-run House in enacting a bill that would include the aforementioned projects? In his campaign, Trump talked up a huge infrastructure program but once in office pretty much dropped the subject and concentrated on giving himself and his pals a big tax cut and trying to kill the Affordable Care Act. But then the current version of the GOP sees tax cuts, particularly favoring the rich, as virtually their only domestic policy.
Still, a swelling federal deficit, an aging population, crumbling infrastructure and increased military spending pose huge challenges. My guess is that in the next few years, the top marginal federal income tax rate will have to be raised to around 50 percent to pay for the services the public wants (if not needs) and to address the rapidly swelling national debt and associated higher interest rates. The bond and stock markets are without mercy. We can’t live in financial Fantasyland forever.
Street Calming
It takes a while to get used to them, but those posted 20-mph zones (enforced by big fines) on streets near schools in Providence do seem to have made street life calmer in those neighborhoods, and safer not just for schoolchildren but for everyone else.
Trinity Rep's Christmas Carol
I think that Trinity Repertory Company should have made more of an effort to wean itself off its heavy financial dependence on A Christmas Carol, which it tries in almost tortured ways to make different every year.
Stripped Down for Spring
A few of the red and yellow leaves on the trees and bushes outside my window have survived the recent storms but most have blown off. As bleak as it looks, it’s comforting in a way because it clears out the trees for next spring’s buds.
Thanksgiving Through the Years
Different species of Thanksgivings. In my past, first there were the long, far-too-complicated and heavy feasts of my childhood, with my four siblings, parents, two or three grandparents, and sometimes a few other relatives from outside our nuclear family, in our house on a hill. It seemed to always be gray and windy that day, with the brown oak leaves swirling.
Then, after the grandparent generation disappeared, the gatherings shrank, and we often ate in restaurants and sometimes included single friends who may or may not have been lonely. Mediocre food but a crisp couple of hours and it was over.
Much later came our kids and the gatherings grew again for a few years.
Now it’s back to small and quiet as kids and others disperse or disappear. But with holidays, as with so many other things, less can be more. I remember with particular fondness the very quiet and mellow Thanksgiving my wife and I had in the dining room of a hotel in 1975 followed by a nice walk in the old streets around Rittenhouse Square, in Philadelphia.
The lyrics and haunting melody of “We Gather Together,’’ the Thanksgiving hymn, although they can be traced back to the late 16th Century as a Dutch Protestant song, have always evoked to me New England’s Puritan origins. “Shining City on a Hill’’ and all that.
1. We gather together to ask the Lord’s blessing;
He chastens and hastens His will to make known;
The wicked oppressing now cease from distressing;
Sing praises to His Name; He forgets not His own.
2. Beside us to guide us, our God with us joining,
Ordaining, maintaining His kingdom divine;
So from the beginning the fight we were winning;
Thou,Lord, were at our side, all glory be Thine!
3. We all do extol Thee, Thou Leader triumphant,
And pray that Thou still our Defender will be;
Let Thy congregation escape tribulation;
Thy Namebe ever praised! O Lord, make us free!
.
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