The economist, former Harvard president and Treasury secretary always has some surprises …
[Summers] has been thinking about our state economy and spoke recently to a private gathering of business leaders to deliver this wake-up call: Even if times look good, Massachusetts should be investing more heavily in the life sciences, infrastructure, and education.
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“I think the dangers are much more on the side of doing too little,” Summers said. “Ironically, sometimes not spending money is taking a much bigger risk than spending money, because it’s gambling with your preeminence.”
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“The state has been squeezing the Medicaid budget very hard,” Summers said. “You can think of it as an expense, but at the margin it’s coming out of being the place where the smartest scientists want to come and work their miracles.”
Summers says some things that a progressive might say: Let’s not rest on our laurels — there’s more danger in doing nothing than something. Education and infrastructure. He says straightforwardly that Beacon Hill should probably raise taxes, particularly on the wealthy.
And yet, one can fairly question if doubling/tripling down on our high-tech industries is the right emphasis. A bond bill like the Patrick biotech bill is indeed money that doesn’t go elsewhere — infrastructure, say. Biotech mostly employs the lavishly-educated, injecting more money into a particular economic strata, attracting investment, yes — but also potentially raising real estate prices even more, and exacerbating inequality.
And the argument that we shouldn’t control medical costs because the medical industry is a big employer … Bob DeLeo makes the same case, and it sounds wrong to me. It is anti-utilitarian. Everyone pays for our outsized medical industry, and our high medical premiums squeeze out other kinds of business activity. You can go to other places in the country and see a small-business culture that increasingly, you just can’t pull off in Greater Boston because of the cost of doing business, especially real estate and health care.
Do we have to become another Silicon Valley — where everyone is made captive to high-tech funny-money — in order to compete with it?
Or maybe that’s the wrong emphasis?
Focus on the money-and I really think Summers shows the argument one can make to the business community that will sway them. The state simply is taxing too letting and not investing enough in its long term future. Connecting the investments he talks about back to tax increases is good messaging for the Progressive Tax campaign. Having someone like him endorse it would also be a coup.
But I agree-we need to spread the wealth. NoPolitician has a great point about putting government offices in parts of the state outside of Greater Boston. Both to boost access to a state government those communities-increasingly becoming conservative-view as distant and remote-and as a way to create more middle class jobs in communities that desperately need them.
Building faster rail to connect Boston to Central and Western MA better and opening up the areas in between Boston and its adjacent communities and Worcester to higher density housing also has to be a policy we push. And more regional government and less NIMBYism from local ones. We really need to reinvent the state to strategically more it for the future.
In your second sentence above should “letting” by any chance be “little”? That’s the only way I can get it to make any sense and the words are typographically similar.
Silicon Valley should serve as a warning. That place is a nightmare now.
I don’t disagree about investing in education and infrastructure, but, of course, it depends for what purpose and how it is funded. The state higher ed system desperately needs money. And on infrastructure, what about some of these tech companies and Harvard, MIT, BU, BC, Northeastern, and BC kicking in a bunch? Maybe GE has some money to spare. Let’s shoot for 10GBps internet everywhere within 495. A high-speed train from Worcester (hell, even Springfield) would be nice so people could be in Boston in around 15 minutes. Fix the damn MBTA. Some companies seemed willing to step on these things to make Boston “world-class” for the Olympics. Why won’t they do it now?
I think we can grow the areas Summers focuses on while also developing a fairer and more robust MA economy overall. We’re probably going to need to start with that Millionaire’s Tax, though.
Great points Doubleman. It’s a question of getting the reflexively conservative (small c) Greater Boston business and political community to realize it’s own long term health is threatened by income inequality. Even Bloomberg is now conceding if we don’t solve this problem-the guillotines will be out. French sans coulettes saved globalization for now-but America’s have already elected Trump. And the sooner we recognize these issues are connected and are symptoms of a disease we haven’t cured-the better.
And west of 495 is rapidly turning into a red state-I wouldn’t be surprised if our state becomes a purple one in 10-20 years time if present trends continue. Democrats really have to stop being complacent at the state level and start using their majorities to push for meaningful kitchen table legislation that help workers find affordable housing, see their kids become upwardly mobile through good schools, and that help create good local jobs and infrastructure that moves people to where the jobs are and the housing is.
Hampshire and Franklin County are among the most liberal in the Commonwealth. Central Mass tend more red.
Agreed.
No special infrastructure is required to speed rail travel between Worcester and Boston. The 15 minute goal is hard to achieve even with exotic technology, because the distance is only 39 miles. No train is going to exceed 15 MPH east of Back Bay, and similar restrictions apply near the Worcester station.
An express train, using conventional locomotives on conventional track, can make the 39 mile run in about a half-hour today, The tracks are already controlled by the state, the only barrier is the decision to buy, maintain, and staff the equipment.
My suggestion is that our goal be to provide rail service between Albany NY and Boston, making stops in Pittsfield, Springfield, Worcester, Back Bay, and Boston (the cities currently served by the daily “Lakeshore Limited”) three times per hour (every twenty minutes), taking 45 min from Albany to Springfield and 45 minutes from Springfield to Boston. That’s 1.5 hours for the 180 mile trip.
I defer to transportation experts who can fine-tune my math, but I’m pretty sure that the marginal cost of getting the speed much faster than this (120 mph average) is astronomical.
Regarding the MBTA, I’m starting to wonder if it makes more sense to focus our investments on surface rail outside the current subway system. Pretty much any infrastructure investment like this must have a 50+ life to be viable — I think there is a very good chance that Boston subways will be under water 50 years from now.
Larry Summers is an important, sometimes great, economist. His record as a public intellectual and policy-maker is mixed:
1. He was one of the brains behind the post-Soviet economy.
2. He argued that women were under-represented in STEM because the lacked aptitude at the high end of the intellect.
3. He accused Cornel West of contributing to grade inflation.
Summers wasn’t alone in post-Soviet economic policy. It was part of the 80s and 90s zeitgeist.
His argument about women was hugely underinformed. There was and is, in fact, an extensive research literature on women in graduate study and professorial positions in STEM. I read it in grad school.
I don’t like Cornel West, but grade inflation is a complex phenomena, and Summers should have shut up.
On the other hand, Summers has done some good economic work, according to Paul Krugman. His talking about secular stagnation has also been important.
The moral of his story and this op-ed is that Summers is a smart, somewhat loose canon that shoots before he’s ready.
Don’t forget what he did on financial deregulation.
http://www.pbs.org/wgbh/frontline/film/warning/
http://www.prwatch.org/news/2013/09/12232/failing-fed-reporters-guide-paper-trail-surrounding-larry-summers
“In the spring of 1998, Deputy Treasury Secretary Larry Summers called Brooksley Born, the head of the Commodity Futures Trading Commission (CFTC), and yelled: “I have 13 bankers in my office who tell me you’re going to cause the worst financial crisis since the end of World War II” if she moved forward with plans to bring transparency and reporting requirements to the OTC market.”
We know how that turned out.
I’d give you a thumbs up, but there are no thumbs.
You have to waste money to make money?
“Massachusetts should be investing more in the life sciences” because
(1) the annual salary of the Vertex CEO fell again in 2016, and is now only $17.4 million, down more than half from the $36.6 million he got in 2014, and
(2) the price of a year’s supply of its cystic fibrosis medicine is $259,000.
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So how do we leverage state investment to benefit the Gateway Cities? We’ve got a bunch of (relatively) low cost housing in and around Pittsfield, Springfield, Worcester, Fall River & New Bedford, Lowell, etc. How do we use state spending to “juice” those local economies? No spending is going to make any one of them Kendall Square II. We couldn’t possibly open enough state government offices in a Gateway City to stimulate that kind of economic change.
So what is it? I could imagine the South Coast becoming an offshore wind center of excellence — a combination of consultants, scientists, manufacturers, installers, trades, policy wonks, the works. But what else do you have?
And what policy (if any) should we have for increasing MA’s number of super educated knowledge economy workers, be they computer nerds or bionerds or whatever? It’s got to be in a place they want to live, as we’re competing on a national scale — and anywhere we do it, they’re going to drive up housing costs. They’re also going to drive investment, blue collar/grey collar jobs (construction, admin, supplies, etc), and indirect and induced economic effects when they spend their high wages. Is it OK if neighborhoods in Gateway Cities gentrify so long as it comes with the badly needed local spending and tax revenue, but not OK if the same thing happens in parts of Southie or Cambridgeport or Eastie or Dorchester?
Given that we’re likely not bringing manufacturing employment numbers up substantially in MA ever again, what’s the plan for jobs that bring wealth into a community rather than just push it around (think service workers — teachers or nurses or baristas or bartenders or the cleaning crew or civil servants)? We know how to do it with high paid professions (LMA doctors and university professors and downtown financial folks and biotech researchers and arts/culture/sports institutions with a regional reach), but do we know how to bring wealth into a community with jobs that pay traditional middle class wages?
That’s the key question and with zero credible conservatives to obstruct a progressive agenda in MA we have a unique obligation to our citizens as well as a test case for a Middle out approach to political economy to make this work.
Simply pretending it’s not a hard problem and doing noting to stall the exacerbating income inequality isn’t enough anymore.
It doesn’t matter that the government jobs aren’t enough-it’s that they are needed far
More in those other communities. I’ll give you wind and I’ll also add actually investing in our state and community college system instead of pretending BC and Harvard are public goods anyone can access. Westfield State should be totally free and have all the resources it needs to thrive.
The creative people I know in Fitchburg-already on the transit grid-have FSI to thank for their presence and we can double down on that there. They want gentrification.
With better transit New Bedford could be a south shore Salem-low cost waterfront bedroom community for young professionals. They can help shore up the school system and bring in a reform minded political culture. Ditto Fall River though proximity to PVD may require regional coordination.
The idea that any gateway city near 495 can simply become a Boston bedroom community is a bit much. How many people do you think are itching for 90 minute commutes each way? It’s not just the railroad time — you’ve got to get to the train station, wait even a few minutes for the train, then after you arrive you’ve got to wait for subway, ride subway or subways or bus or buses, and then walk to work. Sure, some folks are game, especially if they don’t have kids. But I’m not sure it’s enough, and certainly not enough to rejuvenate New Bedford and Fall River and Lowell and Worcester.
Expand colleges as a source of jobs? I mean, sure, you could have more, but there’s really a limit there too. UMass Lowell has 2200 employees. If you’re going to spend money reducing tuition, where’s the money to also expand the school? Even if it were to be a sound state economic investment, you’ve still got a clear cash flow problem, and you’re only getting a few hundred employees extra (plus limited induced additional employment).
Other government jobs? Like what? Exactly what government function with an existing workforce and location are we going to rip out and ship to Springfield? And what do we do with current employees? Want to do it for a new agency? Sure. How many of those are there? How many jobs? And which agency doesn’t benefit from being in proximity to other agencies, the executive branch, or Boston’s more highly skilled workforce?
“Simply pretending it’s not a hard problem and doing noting to stall the exacerbating income inequality isn’t enough anymore. ”
I absolutely agree. But it seems most posts (including yours) go the other way, pretending like it’s an easy problem to solve if we just do X, Y, Z. I’m just not seeing the numbers pencil out. Someone needs to connect a few more dots for me to get it.
I’m a narrative guy not a data guy-my ideas will win votes more than wonky proposals will-that said-by all means use this space to suggest some wonky proposals that solve these problems. I think you’ve cast deserved skepticism on many of the solutions me, no politician, john t may and others have proposed-but I have yet to see concrete proposals or alternatives on your own. You and I both agree the status quo is socially, ecologically, and economically unsustainable-so whats the alternative that works?
Is it just me or have you gotten a bit bitter on this thread?
Sorry to pile on, but New Bedford — 60 miles away — is never going to be comparable to Salem (at 22 miles away) as a bedroom community. It’s three times further away. If New Bedford is to be a bedroom community of any larger city, that city should be Providence RI rather than Boston.
I think that our longer-term focus should be on regional planning and development so that people in Massachusetts don’t have to commute 60+ miles each way each day. Surely history already shows us that the transformation from vibrant small city or town to “bedroom community” has been toxic for cities and towns across Massachusetts and America. Children are happier and healthier when they grow up knowing and seeing their parents at work during the day. Parents and marriages are happier and healthier when they know and see each other at work during the day as well as at night. Small “main street” businesses thrive when they have customers who live nearby during the day as well as at night.
On a more agreeable note, the spin I have on locating state offices in outlying areas is to follow the “little city hall” example, and populate our outlying areas with a large number of small state offices that local residents can walk to and that provide a human face to government services that no online or phone system can ever accomplish. Yes, these are more expensive. Yes, we must raise taxes on the wealthy in order to provide them.
Nevertheless, former mayor Kevin White showed that they can be an EXCELLENT way to build confidence in and even enthusiasm for state government.
Why are you so certain that people wouldn’t take a 60-mile train ride commute in to work if it meant owning a home in a neighborhood and community they love (whether that happens to be a lively urban neighborhood or more of the “bedroom” variety)? Hundreds of thousands of people commute into NYC by train every day Fromm Suffolk County, NY on Long Island, the Hudson Valley, Central NJ, and parts of Connecticut that are more than 60 miles distant from Manhattan.
The difference is that the train service is frequent, reliable, cleaner (electric), and overall much more pleasant to ride than our Commuter Rail.
Fair enough, I’,ll walk back the “never going to be …” portion of my comment.
I’m certainly supportive of frequent, reliable, cleaner, and more pleasant commuter rail service throughout the state.
I think the concept of the “bedroom community” remains something that I’d like us to explore more thoroughly before building out. Our society has options today that were not available to Suffolk County, NY when its transportation system was being designed and built.
I don’t think you guys get it-this state is going to grow more conservative not less over the next 20 years if class stratification continues to accelerate at the pace that it is. More folks decamping for cheap land in NH, more folks in Western and Central MA moving out of the state entirely, and folks in the gateway cities left behind becoming more and more checked out from the political process.
We need a One Commonwealth solution that reconnects the dislocated and disconnected parts of the state back to the parts of the state that are thriving.
I honestly do not think having the creative economy drive all of our policy decisions is going to result in something healthy or sustainable. It’s just trickle down economics with some socially progressive lipstick smeared on the pig.
So by all means crunch numbers and come up with alternatives that work-what I see are professionals already doing well and enjoying the cultural and social benefits of their wealthy enclaves lecturing the rest of us on why a better way isn’t possible. Is this what we want the Democratic Party to look like? The upper middle class telling the rest of us to move or learn a better skillset? I think there has to be a more inclusive and viable economic vision than that. Otherwise lower class voters will keep pulling Republican ballots-even in this state.
We’re not going to get more conservative over the next 20 years as it relates to marriage equality, reproductive rights, climate change and other social issues that professional class wealthy liberals can embrace. .
The divide is not going to be left/right or liberal/conservative. It’s going to be the have and have not, the rich and the poor. And yes, our state is soaring on a trajectory of an ever widening rich and poor divide.
By abandoning the working class and their crass opinions, the Democratic Party was able to court a few key demographics (professional class women, minorities, GLBT community and the urban poor) and cobble them into an alliance that would put them over the top while still snuggling with the wealthy class.
As the aforementioned divide widens and we become more starkly rich/poor, the electorate will vote for the candidate who, along with their party, attacks the status quo and promises to make the working class great again. Last time in the Massachusetts governor’s race and with the last presidential election, that person was not a Democrat.
Why is it that Dems suffer for not sufficiently aligning with the working class (an argument with some merit), but the GOP doesn’t suffer for actively attacking the working class, from right-to-work, minimum wage, taking away health care, down the line?
Maybe there’s something else going on? The narrative of the leftist criticism of the Dems has some begged questions.
You’re making S’tom’s argument for him: folks ‘decamping’ to NH can make the 2 hour (or more) commute into Boston bcause they can do so in the comfort of their own automobile; a similar trip utilizing the present MBTA commuter rail would be a combination nightmare of parking and tortuous, overcrowded, trains.
So the solution -or ‘narrative’- is simply to build a better, and farther reaching, MBTA: one that extends to Manchester NH and New Bedford Mass… Competing with the automobile requires actual effort.
> So the solution -or ‘narrative’- is simply to build a better, and farther reaching, MBTA: one that extends to Manchester NH and New Bedford Mass
That’s one approach. Another is to build an even better inner Boston metro MBTA (plus better sidewalk and bicycle amenities) and build more housing, parks, and schools. We know damn well there’s tremendous demand to live in Boston, Cambridge, Brookline, Quincy, Somerville, Newton, Dedham, Revere, Winthrop, and Everett. We know it to be true because the cost of housing (own or rent) is remarkably high, indicating demand outstripping supply.
Tell me what inclusive, bottom-up economic development looks like — how it’s different from what was proposed, if not enacted, by Gov. Patrick, say. In all my reading of Thomas Frank et al, I hear a lot of complaining but a very foggy picture of what it actually looks like w/r/t policy.
Obvs that goes for John’s comment, below.