Let's Not Play Prisoner's Dilemma

Category:  BloggERy
Thursday, December 8th, 2011 at 8:19 PM
Let's Not Play Prisoner's Dilemma by Jay Stevens
America On the Decline

Mark Price has a roundup of intriguing links relating to poverty and redevelopment at Third and State that's worth a look. I recommend going over and checking out both the post, the blog, and the man. 

Anyway, I liked the last two links the most, to articles dealing with effective means of developing -- or redeveloping -- cities. The first is a cautionary tale from today's Pittsburgh Gazette:

The $22 million in local and state incentives used to entice Chiquita's headquarters to Charlotte -- and other payouts like it -- are critical in the fight to create jobs, recruiters say.

But the bets, using taxpayer money, don't always pay off. Critics say incentives might have little influence on a company already planning a move or do little more than shift workers from one state to another. And when government money is a deciding factor in the decision to relocate, some worry the company will flee to another state when the agreement expires.

The worst part of it is that cities are pitted against one another in a kind of prisoner's dilemma. If cities cooperate, and not offer corporations excellent tax breaks, then corporations will pay reasonable tax rates and not jump from city to city. But if one city offers a deal, the corporation will move there at the expense of the others -- so the incentive is to offer a deal. But if everyone is offering deals, the only way to get a business to move to your city is to offer a better deal. And it spirals down from there, especially in hard times when municipalities are desperate for employers.

Corporations like Chiquita are only too glad to take advantage of desperate times and wrangle sweetheart tax deals for themselves.

But municipalities don't have to play the game. They can opt out altogether. That, at least, is the theory from the Keystone Research Center (via another Mark Price link):

...instead of handing out checks to lure new businesses to the state (or retain existing ones), a dominant practice to date, Pennsylvania should strengthen its efforts to grow its own companies by investing in the public goods of a 21st-century economy. These 21st-century public goods start with education and traditional infrastructure but also include technological infrastructure and amenities, cultural assets, and natural endowments that make Pennsylvania an attractive place to live and work. Today’s public goods also include institutions that support specific industry sectors, such as training partnerships and sector-specific innovation centers that build on Pennsylvania’s higher-education institutions.

The KRC suggests holding companies that do receive subsides or tax breaks accountable for decent wages and job creation. Maybe a simple clause tying a certain number of hires or investment amount to the subsidy or tax break. The

KRC also suggests that cities "should focus its job-creation dollars on already-developed...cities where new jobs will rely on existing infrastructure..."

I'd add that cities should spend its job-creation dollars on locally owned businesses and regionally-specific industries already in the area. It's better to build on a kind of industry that already thrives in your city than it is to try to lure a new one in. In Erie, for example, maybe we should be working to support and expand the tool and die shops that are so prevelant. Make Erie the tool and die capital of the world!

Or something.

Erie Reader: Vol. 5, No. 13
Now Available — Pick It Up Today

CURRENT

Bob Protzman lines up some upcoming jazz festivals that may intrigue you.

2015 has been a good year for new music, but we can't keep track of everything. Here are four albums from the first half of 2015 that we didn't review and still deserve your attention.

FILM screenings award-winning documentary Wednesday, July 1.

With summer officially upon us, plenty of time remains to help Bike Erie reach their 2015 National Bike Challenge goals. 

The High Priestess of Soul to be the focus of a new 100-minute documentary.

IN THIS ISSUE

We have a sincere offer to help revamp Celebrate Erie

Refugees find Erie's Preferred Community rating not very representative of Erie's desire to educate and hire recently relocated individuals.

The UPMC Sunset Music Series will host a display of some local country veterans and new kids on the block when Refuge and M4 hit the stage at Presque Isle Beach 1 Wednesday, July 1.

When the members of The Clarks come to the Burger King Amphitheatre Tuesday, July 7, they'll bring nearly 30 years of good ol' rock experience with them.

The three-day music festival kicks off July 3.

Innovation in and outside of the plastics industry makes Rehrig Pacific a business to be trusted in the Erie area.

Brooke Surgener, a member of the Reader's 2014 40 under 40 class, will show off her DIY attitude and musical talents at the Erie Art Museum's Mid-day Art Break Wednesday, July 1.

The King of Rock 'n' Roll is coming to the Erie Playhouse next week, in the form of the stage's latest fundraising event: Luigi Jannuzzi's All The King's Women.

Can the struggle for power in local government take a break so that change can be achieved?

"We are very stoked for our debut at the Kings Rook and look forward to an epic night full of dancing," MoChester guitarist/pianist/vocalist/cowbellist Jonathan Sheffer said.