I think spending $1.65 billion to bribe Shell to build the ethane cracker facility in PA is stupid for a number of reasons I’ve explained in various other posts, but this quote from Tom Corbett is really a good summation of what I disagree with.
Flanked by lobbyists, labor leaders, lawmakers and gas industry interests, Gov. Tom Corbett this afternoon launched a very public and formal public defense of a proposed $1.65 billion tax credit for Shell Oil and other petrochemical producers, arguing that it could spark “a new industrial revolution in Pennsylvania.”
“Some say Pennsylvania should not invest in our future. They say the gas is here and Shell will come here regardless,” the Republican governor said at a Capitol news conference. “They are wrong.”
Just to keep beating the drum on this, fully 78% of Pennsylvania’s GDP comes from just the top 5 metro regions. The reason productivity is so high in these places is because of agglomeration. They have dense clusters of people and employers, and their economies revolve around people buying high-skill, medium-skill and low-skill services from other people. That is what makes a modern advanced economy so much more productive than a predominantly industrial economy.
So it is very strange that Tom Corbett is putting so much focus on sparking “a new industrial revolution” when the parts of the state that are prospering most are doing so because they’ve moved past the Industrial Revolution.
Further economic and prosperity gains are going to come from more urbanization – moving more people to the top 5 metros, and making it easier for people to get around within and between those metros.
Trying to increase productivity from a very low level in economically stagnating areas of the state is just a stupid use of state money.
Corbett is offering a false choice with this “some say Pennsylvania should not invest in our future” crap. Most of us Cracker opponents are out here arguing pretty loudly for investments in Pennsylvania’s future – but sound investments like, you know, educating the next generation of workers, and upgrading the state’s deteriorating transportation infrastructure.
One obvious place to invest that $1.65 billion is in expanding mass transit networks in Pittsburgh and Philadelphia. Both of those cities’ central business districts are seeing pretty strong job growth, and transit ridership numbers are growing, as Daniel Denvir reports.
But both cities’ transit systems are staring down big service cutbacks that are going to choke off that job growth if the state doesn’t come through soon with more funding. The case for state investment there is strong, since making it cheaper and easier for more people to live and work in the fastest growing labor markets is the the bread and butter of economic development. The state should be trying to capitalize on existing successes, not trying to reinvent the wheel.
(Thanks: John Micek)