Economic retrogression?

I have always been looking for the right phrase to capture the spirit of the inverse of economic development. That being policies or direct efforts by government that lead to plant closures, disinvestment, etc. I also include in this category efforts to buy out firms to stay in your province a few years more to satisfy a short term political need while not spending a nickel to address the long term structural economic development challenges. In my opinion, except in very rare situations, the government should not be bailing out companies that fall on hard times.
What is a good phrase for this? Here are the antonyms for the word ‘development':

decadence, decay, decaying, declension, decline, degeneration, descent, deterioration, downgrade, ebbing, weakening, regression, retrogression.

Which one makes sense?

The truth is that this is a no win situation. AbitibiBowater is looking for the biggest subsidies and they got it from Newfoundland. $150 million in subsidies to keep 1200 people employed. AbitibiBowater has stated that these mills are not profitable so by definition the government funding is a direct subsidy to keep an unprofitable mill up and going.

New Brunswick tried to pony up the big cash. $16 million to save 400 jobs for a few more years. That’s $40,000/per job which is a vast amount of money but it pales in comparison to the $125,000/per job ponied up by Newfoundland to keep Abitibi in Stephenville.

And what did Newfoundland get for that? They bought 10 years. Danny Williams and his cronies will be long gone. I would have preferred $150 million invested in something that had a shelf life of at least 20-30 years.

I realize how stupid this sounds. I am making an academic argument while 400 people have lost their livelihood in Dalhousie. Easy for me to make judgements with my salary coming in and plate full. I realize the hypocrisy.

But at the same time, why doesn’t somebody look at the Dalhousie/Campbellton area and think through what their economy should look like in the 21st century context? And what role should the government play to help make this a reality? Because, for me, slowly letting the area bleed to death is not good policy. Bailing out firms that don’t have an economic reason to be there anymore is bad policy. Propping up EI to help folks that are trying to cobble enough weeks together is not good policy.

And then people say to me, what industry would ever want to go to Dalhousie?

Exactly my point. What have community leaders done? What has the government done? What investments and effort has been made to truly redifine Dalhousie for the 21st century?

Well, you say, it’s predominately a low skilled, blue collar area. Exactly. And the government played a significant role in this by subsidizing the development of most of the major blue collar industries up there. The mine, the power plant, the mills – all the result of direct government policy.

And, somehow, we aren’t supposed to take the same approach for the 21st century. Somehow it was good government policy to build through subsidy, royalty reduction and direct action a large blue collar economy and as that economy starts to wane, we don’t want to think about what could be next?

I am fascinated by the lack of imagination in government these days. Our guys were willing to anti up $40k per job to keep 400 mill jobs for a couple more years but wouldn’t think of putting that kind of dough into a 400 person animation studio for Dalhousie. Or at least they aren’t even thinking in that direction.

And to top it off, the TJ story leads with “We Will Overcome” as a quote from the Premier. We shall see. We shall see.

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8 Responses to Economic retrogression?

  1. NB taxpayer says:

    You’re right David. It’s definitely short-term thinking in practice (handouts to declining industries and tax hikes) and long term dreaming in theory (self-sufficiency project).

    Like you, I would like to see some short-term dreaming (vision) in practice and long-term thinking in theory.

  2. Anonymous says:

    Very scary how governments make bad decisions for (short -lived) good politics.

    Not sure what the answer is; with seats up for grabs the government feels compelled to buy the jobs and therefore the votes. Until people see through the short-sightedness and demand better, we are slaves to expensive band aid solutions.

    We need to focus on sustainable, practical solutions and we need attitudes to change to show more flexibility in the training,location and types of jobs. Our economy is no longer driven by abundant fish resources nor tall trees for sailing ship masts nor, in this case, pulp for cheap paper. We need to change and stop living in the past; and we need to be prepared to absorb a little pain during the transition.

    Perhaps we need legisltion,similar to the no deficit legislation,that prevents bailing out failing businesses. Investments can only be made in new economic development. If the government wants to bailout bad businesses, use the politcal party money, not the taxpayer’s money.

    Best of luck to the people of Dalhousie. Letting go and moving on will be difficult but in the long run it could be the best thing that could happen in a dead end industry. Adversity can provoke positive change. I hope you pull it together and recover as Moncton has from the CN/Eaton’s situation and Summerside with the air base closure.

  3. Anonymous says:

    David: “But at the same time, why doesn’t somebody look at the Dalhousie/Campbellton area and think through what their economy should look like in the 21st century context?”

    Anon: As a relatively young and well educated person who returned to the north, I am disappointed in the result.
    If you want to visualize the 21st century version of Campbellton/Dalhousie, you only have to look out your window. All the youth (the most energic and intellegent) are living in Moncton. You are reaping the rewards of decades of poor policy in the north that has left “coming home” as a laughable option for anyone who experienced the bigger world. The north will continue to decay as the young and talented have zero reason to return.

  4. NB taxpayer says:

    All the youth (the most energic and intellegent) are living in Moncton.

    This is what I mean about not thinking outside the beltway. When I lived in Ottawa, not once was our region (yes, that includes Moncton) described as having the most youth, intelligence or industry, etc. It was the opposite, and until you local folks realize that notion/reality, we are destined for more failure and decline.

  5. Trevor says:

    Excellent points on winning short term political points.

    Everyone should read Nine Shift to gain a greater appreciation of why and how our economy needs to shift from industrial age to knowledge based. I was a skeptic until I read the whole book…

    Click Here

  6. NB taxpayer says:

    Great link Trevor. I know you and Dave have probably both read Tom Corchene’s A Human Capital Future for an Information Era and Richard Florida’s Rise of the Creative Class. But I know there are a bunch in freddy who need to be shipped a ED starter kit with both those books inside.

  7. richard says:

    “Everyone should read Nine Shift “

    I expect that a good number of the Premier’s aides have read those and other books. Problem is, there is little incentive for politicians in NB to do anything but ‘short-term thinking’ and ‘long term dreaming’. That is what gets them re-elected.

    Only a small proportion of the voters are going to do much reading on these subjects. But they can be made election issues if media can push them into the public’s face. Until pushed by an electorate informed by an aggressive media, you can’t expect much response from politicians. Except, in course, for those rare fellows like Robichaud, who (love him or hate him) had a mission and the gumption to act.

    I keep waiting for Graham to show us whether he is a Robichaud or a Lord.

  8. Trevor says:

    It does boils down to leadership Richard… Whilst we wait some of us will be trying to enlighten the electorate: http://shiftwatch.blogspot.com/

    I’am also in the process of reading the World is Flat. Great read with overtones from Nine Shift

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