public private partnerships | Normative Narratives

Original article:

The possibility that JPMorgan Chase would build a two-towered, $6.5 billion headquarters on the Far West Side of Manhattan streaked across the skyline in recent weeks, only to die quietly on Tuesday.

Jamie Dimon, chairman of Chase, called Mayor Bill de Blasio and Gov. Andrew M. Cuomo on Tuesday to say that the country’s largest bank had decided to stay put on the East Side.

In the course of negotiations, the bank suggested that thousands of midlevel jobs could leave the city if the deal foundered. The mayor, in turn, publicly scoffed at the idea of handing over $1 billion in tax breaks and cash to Chase, on top of an existing $600 million in property tax breaks.

“This is an outcome that validates our approach, and our belief that these deals often come down to factors that have nothing to do with taxpayer subsidies,” Alicia Glen, deputy mayor for economic development, said in a statement on Tuesday. “We’re glad that JPMorgan has decided to maintain its buildings and its work force right where they are for the foreseeable future.”

Critics of corporate subsidies worried that the city might be returning to an era of retention deals, which had largely disappeared under Mr. de Blasio’s predecessor, Mayor Michael R. Bloomberg. The Committee for Better Banks, which includes labor unions and some liberal groups, was about to issue a report denouncing subsidies for Chase when the deal collapsed.

“New York has had an amazing run of job growth over the past decade,” said Jonathan Bowles, director of the nonprofit Center for an Urban Future. “I don’t see the need to turn back the clock and start another wave of big companies clamoring for tax breaks.”

When I started Normative Narratives 2 years ago, one of the first issues I wrote about was the (mis)use of tax dollars to attract private sector jobs. This “race to the bottom“, alongside unlivable minimum wages, make up the two most glaring forms of corporate welfare in America.

At a time of widening inequality (during which economic growth has gone almost exclusively to the wealthiest), marked by record corporate profits / cash holdings / tax minimization, and calls by those on the political right to slash the social safety net in the name of “fiscal responsibility”, corporate welfare is tantamount to taking from the poor to give to the rich.

Tax dollars should be spent on projects that make areas naturally more attractive to employers (a more skilled citizenry, better infrastructure, etc.). Since these projects are mutually beneficial, private money / expertise should supplement public efforts (public-private partnerships), which in turn would build sustainable partnerships between corporations and municipalities (the opposite of “races to the bottom”).

Blindly throwing money at corporations because they promise to create jobs, without legally binding commitments and closely scrutinized CB analyses, is not a growth strategy.

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Corporate interests always claim the sky is about to fall; look at an almighty “job creator” the wrong way and they’ll close up shop and skip town. In reality, there are costs and uncertainties involved in moving, two things businesses don’t like. Case in point; JP Morgan threatened to move if it did not get what it wanted, only to stay put.

Good job by the De Blasio administration in standing up to JP Morgan. The net result is the same number of jobs (perhaps some short term construction jobs were foregone), and $1 billion more in NYC’s coffers to address the many deserving issues affecting the city. Hopefully this show of political will can serve as an example for municipalities around the country.

Proponents of such subsidies would probably argue that NYC bargains from a unique position of power, which is true. However, other municipalities have their own “natural” comparative advantages (such as lower real estate costs, lower costs of living, economies of agglomeration, etc). If such a “draw” to an area does not exist, all the more reason to invest in creating one!

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Generally speaking, large corporations decide they need to expand operations in order to meet demand, then shop around for the best deal (not the other way around). In other words, most subsidized jobs would exist with or without subsidies.

Ultimately, there needs to be better coordination at the federal level (including greater redistribution of tax dollars from high employment to low employment areas) to ensure municipalities are not bidding against each other for jobs that would be created anyway.

There are no shortcuts to sustainable economic development, but fiscal mismanagement, such as foregoing investing in making a market “naturally” attractive in order to subsidize jobs, can stall / reverse the process. Racing to the bottom provides cover for current administrations (and jobs for a select few), while ultimately leaving an area worse off in the long run (like putting a very expensive band-aid on a broken bone).

The De Blasio administration and JP Morgan had a staring contest, and JP Morgan blinked. If you happen to find yourself in NYC any time soon, look up–the sky isn’t falling.

A recent NYT article highlight’s a public private partnership (PPP) aimed at exposing children in computer programming at a young age:

Since December, 20,000 teachers from kindergarten through 12th grade have introduced coding lessons, according to Code.org, a group backed by the tech industry that offers free curriculums. In addition, some 30 school districts, including New York City and Chicago, have agreed to add coding classes in the fall, mainly in high schools but in lower grades, too. And policy makers in nine states have begun awarding the same credits for computer science classes that they do for basic math and science courses, rather than treating them as electives.

It is a stark change for computer science, which for decades was treated like a stepchild, equated with trade classes like wood shop. But smartphones and apps are ubiquitous now, and engineering careers are hot. To many parents — particularly ones here in the heart of the technology corridor — coding looks less like an extracurricular activity and more like a basic life skill, one that might someday lead to a great job or even instant riches.

The spread of coding instruction, while still nascent, is “unprecedented — there’s never been a move this fast in education,” said Elliot Soloway, a professor of education and computer science at the University of Michigan. He sees it as very positive, potentially inspiring students to develop a new passion, perhaps the way that teaching frog dissection may inspire future surgeons and biologists.

But the momentum for early coding comes with caveats, too. It is not clear that teaching basic computer science in grade school will beget future jobs or foster broader creativity and logical thinking, as some champions of the movement are projecting. And particularly for younger children, Dr. Soloway said, the activity is more like a video game — better than simulated gunplay, but not likely to impart actual programming skills.

Some educators worry about the industry’s heavy role: Major tech companies and their founders, including Bill Gates and Facebook’s Mark Zuckerberg, have put up about $10 million for Code.org. The organization pays to train high school teachers to offer more advanced curriculums, and, for younger students, it has developed a coding curriculum that marries basic instruction with video games involving Angry Birds and hungry zombies.

The lessons do not involve traditional computer language. Rather, they use simple word commands — like “move forward” or “turn right” — that children can click on and move around to, say, direct an Angry Bird to capture a pig…The use of these word-command blocks to simplify coding logic stems largely from the work of the Massachusetts Institute of Technology Media Lab, which introduced a visual programming language called Scratch in 2007. It claims a following of millions of users, but mostly outside the schools.

Then, in 2013, came Code.org, which borrowed basic Scratch ideas and aimed to spread the concept among schools and policy makers. Computer programming should be taught in every school, said Hadi Partovi, the founder of Code.org and a former executive at Microsoft. He called it as essential as “learning about gravity or molecules, electricity or photosynthesis.”

Among the 20,000 teachers who Code.org says have signed on is Alana Aaron, a fifth-grade math and science teacher in the Washington Heights neighborhood of Manhattan. She heard about the idea late last year at a professional development meeting and, with her principal’s permission, swapped a two-month earth sciences lesson she was going to teach on land masses for the Code.org curriculum.

“Computer science is big right now — in our country, the world,” she said. “If my kids aren’t exposed to things like that, they could miss out on potential opportunities and careers.”

Introducing kids to computer programming at a younger age is a great idea. The U.S. controls about 40% of the $960 billion global computer software / services market. Furthermore, some of the fastest growing sectors in the U.S require computer programming skills (especially when you consider [non]tradeable goods). As the world becomes more connected via internet penetration–the number of global internet users is set to surpass 3 billion people by years end–computer programming will only become a more important professional skill.

Learning computer programming may well be more effective at a young age. I have had many people try to teach me computer programming, and one common theme between teachers has been comparing learning coding to learning a foreign language. Many people believe children can more effectively learn foreign languages than adults, perhaps the same is true of coding?

The purpose of early exposure is not, as some dissenters misinterpret, to have children producing complex codes and programs. By making programming more fun and accessible while nailing down the basics, kids will be more confident in their ability to develop advanced programming skills later in life if they so choose.

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Teaching our kids computer programming skills is important for staying competitive in a field that is currently dominated by the U.S. Other countries are teaching computer programming skills; the U.S. cannot afford to sit still or we will be passed by competitors.

In a global economy where many low skill jobs have fled to lower wage countries, the U.S. needs to maintain it’s competitive edge in this growing industry. Leveraging private sector money and expertise should make this important educational reform even more affordable and effective.