GE coming because of our brains, not brilliant pols
With all the excitement and high-fiving among state and city and leaders starting to wind down, now comes the annoying reality check on the General Electric news that ruins all the fun.
It turns out Charlie Baker and Marty Walsh don’t walk on water. Their bipartisan rowing in the same direction was surely helpful (there is the matter of those pesky public incentives handed to a fantastically profitable Fortune 100 company, which we’ll get to). But GE’s decision to come to Boston probably has a lot more to do with MIT, SCPs (“smart, connected products”), and area companies like PTC than it does with the BRA, EOHED, and combined charm offensive of Teams Walsh and Baker.
Michael Porter, one of the preeminent thinkers on what drives economic activity and a father of the idea of economic “clusters,” makes that clear in an op-ed in today’s Globe. “GE decided to locate its headquarters in Boston because this region is the center of an emerging cluster of interrelated technologies and companies that is critical to GE’s long-term success,” he writes.
GE’s decision is also part of an overall movement of companies and educated talent from suburbia, where they safely took refuge during the grim decades for US cities, back to resurgent urban centers. The Globe’s Jon Chesto highlights that, as did Aaron Renn last week in this piece for City Journal. “The children of those who fled to suburbs to escape urban decline have embraced city living,” writes Renn. “Unlike the Baby Boomers, who were raised in an era when cities were getting worse and worse, the Millennials came of age as cities were being reborn.”
Porter adds an interesting nugget about GE’s decision last year to site in Boston a $1 billion energy unit called Current. “Massachusetts state officials learned about the decision after the fact,” he writes. “There were no incentives.”
Which gets to the matter of the $150 million state and city package put together for GE’s new headquarters. Conservative Globe columnist Jeff Jacoby calls it a “corrupting shell game.” He fairly asks why $150 million in public money is needed to “enrich a vast multinational company” with $150 billion in annual revenue. “Baker and Walsh are taking bows, but their crony capitalism is nothing to cheer,” he writes.
All the celebrating of city and state ingenuity also seems to play off what might be called the Menino-Detroit Fallacy. The late Boston mayor, in a 2013 interview with The New York Times Magazine’s Mark Leibovich, said he would have liked the chance to work some of his urban mechanic magic on the basket case of urban America. “I’d blow the place up and start over,” Menino quipped about an imagined opportunity to lead Detroit.
The idea that Menino’s nuts-and-bolts approach to city government could have upended the global economic forces that put Detroit back on its heels was as absurd as the idea that his leadership explained Boston’s boom over the previous 20 years. As Porter and many others have pointed out, the global economy is now richly rewarding the things that Boston has in abundance. That wasn’t true in the 1950s, and Boston was an economic backwater then, while Detroit was booming.
Solid, honest governance is important. But much bigger forces account for the lion’s share of why our region is doing so well — and why GE is heading here.
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Michigan Gov. Rick Snyder apologizes and vows to fix the Flint water crisis. (Detroit Free Press)
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The Texas attorney general is the latest to declare daily fantasy sports to be illegal gambling. (New York Times)
New Bedford Mayor Jon Mitchell blasted the state’s management of State Pier on the city’s waterfront after two cargo ships were diverted to other ports because there was no refrigeration available for their produce. The ship diversions left more than 100 longshoremen without work. (Standard-Times)
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More than a dozen Massachusetts schools received bomb threats Tuesday morning. (WBUR)
The Easton School Committee is considering a measure to push back the start time for middle and elementary school students. (The Enterprise)
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A Kinder Morgan subsidiary is asking the state Department of :Public Utilities to allow the company to conduct surveys on private property along the route of its proposed natural gas pipeline into Massachusetts. (Eagle-Tribune)
A Danvers group is trying to convince homeowners to stop burning yard waste. (Salem News)
The Supreme Court has let stand a $63 million judgment against Johnson & Johnson awarded to the family of a Plymouth girl after the girl had an extreme allergic reaction to Children’s Motrin that left her nearly blind and severely burned in 2003. (Patriot Ledger)
The Florida Supreme Court will not review the murder conviction of former FBI agent — and Whitey Bulger pal — John Connolly, who is serving a life sentence. (Boston Herald)
The Worcester County House of Correction in West Boylston is struggling to maintain modular buildings that have gone beyond their typical expiration date. (Masslive)
Keller@Large asks what is wrong with Middlesex County District Attorney Marian Ryan after the embattled prosecutor reiterated her desire to try Marathon bomber Dzhokhar Tsarnaev for the murder of MIT Officer Sean Collier.
Two people were shot yesterday afternoon at Maverick Station in East Boston. (Boston Herald)MEDIA
Nielsen is expected to announce it will include social media chatter from Facebook and Twitter in its metrics for television ratings. (New York Times)