The Outstater: A Conflict of Visions Over Regional Cities

September 6, 2015

by Craig Ladwig

Forgive skeptics of the tableau vivant unfolding for Regional Cities initiatives across the state. They seem dumbstruck. They don’t have the data to challenge the expansive vision and supporting PowerPoints of economic-development directors and their armies of experts. That does not mean, though, that they don’t have a vision of their own.

In my city, the economic-development group has documented its vision in a 200-page Regional Cities grant proposal. It is a good bet that the plan — political skids having been greased — will win the managed competition for part of the $84 million that the governor and Legislature have set aside for this sort of thing. Indeed, our entry is said to be the perfect model of a public-private partnership.

Its strongest point, repeated with chest-poking intensity during lobbying this summer, is that if our region doesn’t put its heart and soul behind the plan, we will fall behind. Sen. Greg Walker, a corporate accountant writing for the quarterly Indiana Policy Review, calls this the “but for” position, as in “but for this hull patch the ship will sink.” It in turn prompts a “then why” counter position, as in “if creating wealth is merely a matter of filing paperwork, then why isn’t everywhere wealthy?”

And so the argument begins. Most agree that the $84-million, one-time prize should be kept in perspective. Just this year, my city alone is expected to issue 1,460 building permits for $600 million in investment. Should we be curious what motivates so many individual permits, such a sizable investment? Would you be surprised to learn that public-private partnerships have little to do with those numbers?

It might be that our economic group has us facing in the wrong direction, distracting and diverting precious civic impulses. A city councilman raised that thought during a tour some years ago of the depressed area of my city. The purpose was to show off the area’s infrastructure in roads, sewers, utilities and, most impressive, the inexpensive and utterly available property ready for investment — “shovel ready,” as they say.

This property was not vacant for lack of public-private partnerships. There had been one such project after another for the previous 40 years, not to mention tens of thousands of dollars in direct government aid. It was vacant because the two features most prized by private investors had been allowed to languish — order and liberty, what has driven our economic growth for hundreds of years.

Lest this be confused with elements of the typical Regional Cities proposal, we are not talking about bike trails. We are talking about allowing a restaurateur to stay open during whatever times are most profitable without being robbed at gunpoint. We are talking about shielding a hairdresser from city inspectors so she can risk sweat equity and define economic development in her own way.

When Steve Goldsmith was mayor of Indianapolis, he had the most beautiful idea. He formed a unit of government with the sole purpose of negating the other units of government. It worked this way: individual pastors, neighborhood entrepreneurs and others in central Indianapolis could call a number at City Hall to explain the obstacle (many of them governmental) standing in the way of their particular vision. Goldsmith then would dispatch his government watchdogs to the site to try to work out a solution. It was called the Front Porch Alliance.

On the flip side of that example, you should know that “crony capitalist” is not some bugbear invented by Democrats. They are real, live, influential men and women, usually Republican, who sincerely believe that the way out of our economic dilemma is through closely held arrangements empowered by government and managed by experts — them.

Don’t get me wrong. There is nothing wrong with taking free money, even from people who think they are smarter than you — that is, not unless it perverts your operational plan, which, unfortunately, free money generally does, often purposefully.

In any case, the last time economists considered a Regional-Cities-type setup viable, Shakespeare was writing sonnets. Adam Smith has since explained that the “public” to which enthusiasts of a public-private partnership allude is simply the government with all its commands, controls and taxation. The “private” is merely the economy. What kind of partnership is that?

Better would be across-the-board municipal codebook reform — make it regional, if you wish — unlocking the resources that bad public policy holds captive. The investors (you and me and your rich uncle John) are already here. Our talents don’t have to be summoned from distant points for an $84-million money drop.

Ultimately, bike trails and river promenades can benefit the public and spur economic development, but to pin our hopes on a few accompanying publicly subsidized partnerships is small thinking. That is especially so considering the hundreds of millions of dollars being invested in our community through the free market.

Can you imagine that — order and liberty spurring local human capital to invest in itself? Now there’s a vision for you.

It is more involved than filing a bureaucratic proposal with the governor, to be sure, but there are local politicians throughout Indiana who believe in it, and there are thousands of local businesses investing in it. We should hear them out before dismissing their reservations as obstructionist.

Again, our economic-development director is surely right that a community without a vision will fail. He and his experts, though, don’t have the only one.

Craig Ladwig is editor of the quarterly Indiana Policy Review.

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