Monthly Archives: December 2017

National Economic Reform’s: Department Of Economic Development

Not since FDR has the United States been faced with the enormity of rebuilding America’s economy and infrastructure. Today our economy as well as the nations infrastructure is putting this nations security and stability in grave danger. Our economy today is already on the verge of falling into the abyss by factors very reminiscent of the events that led to the Great Depression of the 1930′s. And, yes another housing bubble like the one we just had in 2008 is poised to burst. But, you wouldn’t know it the way Trump is citing his most illustrious accomplishments and of course the media is right behind with their bogus reporting of the unemployment numbers. What we are faced with today is that the United States is still woefully unprepared to handle any financial calamity.To top it off our “Wizards” on capital hill and Trump in the White House continue to be oblivious to the calamity of either a infrastructure disaster or the continued economic woes that are keeping millions of American’s languishing in financial devastation would do to this nation.

All ready in practically every city across the country there is a Department Of Economic Development. The primary focus of this department is to generate more business growth within their respective city. In doing so more tax revenue would flow into these cities to support the mandated public services that are now required by law. Without business growth as in so many instances today all across the country city budget shortfalls only exasperate an ongoing economic domino effect of financial hardship for all. There are many factors that have to be implemented to secure business growth to increase and expand the tax base within each city all across the country. Without more educational venues offered, accessible reliable public transportation available, affordable decent housing and all the other logistics that make it not only conducive but productive for business development in cities and towns business growth will continue to decline. The tax base will be put on the burden of the home owner which only creates more economic hardships for all.

When The Department Of Commerce and Labor was created back 1903 and subsequently consolidated in 1913 into the Department of Commerce the only time that that agency has managed to spur real economic growth was through the intervention of FDR. The numerous public works projects that FDR implemented facilitated Americas victory in World War II and propelled the United States to it’s greatest economic expansion following the War through to the end of the 1960′s. What has happened since are a number of policy changes that have undermined the economic and financial opportunities of so many millions of Americans. Consequently, we have inadvertently created the greatest wealth disparity gap in history, lost almost all of our manufacturing capabilities, and reduced the middle class to almost extinction. All this with the fact that our educational levels have plummeted so that the United States isn’t even on the radar sort of speaking in global educational standards. In essence our graduates are are not fully prepared for whatever jobs that are available today.

Now, when the economic calamity from 2008 financial crisis hit the fallout is still keeping the United States economy stagnant at best. Just a few years ago the Hostess Corporation closed so many bakeries they laid off over 18,000 employees just in time for the holidays. In Florida of that same year over 2,000 state workers suffered the same fate. Today, the retail industry is dying forcing more people onto the unemployment lines. With Trump in the White House and our Republican led Congress have done actually nothing to spark a rejuvenation in employment numbers. The media still fails to tell the truth about the sad fact that unemployment and underemployment have decimated our nations ability to prosper. This is another reason why there is so much agitation especially within the Black community. In every city and town across the country the African American unemployment rate is more than triple that of what the media is reporting.

The reality has yet to hit home to our elected officials to the true crisis in the country. The lack of opportunity for millions of Americans to be able to earn a living wage is staggering. And, yet too many officials really have turned a blind eye to what is really going on. When we have riots in the streets instead of workers in factories, or behind counters, or in so many other occupations is a tell tale sign that governmental policies for the past 40 years have undermined the American workers ability to prosper. When we have CEO’s raking in huge exorbitant salaries and corporate profits at record levels while the rest of us languish with starvation wages or worse yet having to rely on meager unemployment benefits that don’t last creates a tempest that is only exasperated by our elected officials failure to implement policies that would propel the United States into brighter and more secure future. What we have today is that our Republican led Governors, members of Congress, as well as our infamous President can’t quite grasp what they have done and continue to do by not ushering policies that actually put more Americans back to work with living wages much like what FDR did.

From all indications since the election it is quite apparent that those in Washington still, like so many Republicans, can’t grasp the reality facing millions of Americans today. The Department of Commerce has done some semblance of trying to reassemble economic growth but this Administration still does not have a definitive plan of direction both short and long term that would effectively curtail the events like the ones that unfolded when the Hostess Corporation closed it’s doors. It is time to restructure the Department of Commerce and re institute an expanded Economic Development Administration so that the Department of Commerce would now become The Department Of Economic Development and incorporate all essential posts that would felicitate economic and financial growth across the country.

Currently there are too many duplications in practically every cabinet post where much needed resources are now being diverted from reaching the areas that need it most. It is quite apparent that steps have to be taken to reform and consolidate especially the current Department of Commerce so that the resources actually will go where they will do the most good. This includes placing the emphasis on Economic Development with a major emphasis on equalizing our trade deficit, investing in infrastructure restoration, securing our energy grid, focus on reducing the unemployment numbers especially in African American communities and establishing living wage standards all across the country. Not just raising the federal minimum wage either.

When most think of our trade deficit many question why China is cornering the market? In practically every shelf in practically every store across the country there are so many items that really are made in China. But, that doesn’t show the bigger picture. When in reality it is not all those imports. Sure, they contribute much to our lack of manufacturing jobs but what else is curtailing our economic growth is right here in the United States? Education for one thing.Today’s educational levels hare a far cry from what the US had back in the 1950 through the 1960′s. The standards in education have made high school graduates not being able to compete for the jobs that are available today. Education of our youth and young adults is vital in turning the tide toward improving the unemployment numbers.

In order to answer why China is gaining economically we have to take a close look at our imports which have for the past 40 years have been far exceeding our exports. Not to mention what NAFTA continues to do in regards to our loss of overall productivity. We have to remember that right after NAFTA was signed in 1993 our job losses were staggering and the effect is still being felt today. Today, our whole economic scenario is almost on the same parallel as the 2008 housing crisis. The pervasive attitude among too many CEO’s forget what Henry Ford did so many decades ago. He strengthened the middle class while today’s CEO’s have only weakened the middle class to the point of almost no return. A recent report shows that wages have continued to stagnate. And adjusted for inflation today’s wages have shrunk drastically. The sad fact that today millions that are still working have seen their earning decrease while everything else the cost keep increasing. This retardation of wages all across the country is the sad reality of today. We have to remember that the health and stability of any country lies with the majority of people earning living wages. The more people with enough disposable income to spend, pay down debt, and to save at least 10% annually is the greatest economic boost for any country. In essence the fulfillment of The Williams Theory of Economic Evolution. That is not the case today of what is happening in America.

What the Department of Economic Development has to do is address our trade agreements and reinforce not on free trade but equal trade along with putting higher tariffs on goods coming in from China, Mexico, Canada and even Germany to name a few. This along with coordinating with other cabinet departments on a unified plan of Direction using National Economic Reform as the guide to implement changes, concepts, and policies that will in fact create the environment that is conducive for more business growth. This along with creating economic opportunities that should be available to every single American. Another sad reality of today is the fact thousands of Americans have already left the country for other countries just because the economic opportunities are more plentiful outside the United States. When people find financial and economic roadblocks right here in America where the land of opportunity has shut it’s doors in so many faces is a travesty that has to be immediately rectified.

The job at hand for the Department Of Economic Development is to expand the tax base all across the country. Work with all other agencies and Departments primarily the Department of Education to retool our educational standards to equip our youth and young adults with the knowledge and the tools necessary so that they can become employable in the jobs of the 21st century. This Department is mandated to rebuild our infrastructure, roads, bridges, schools, and other buildings that poise a threat to the safety of all. To work with the Department of Energy to update our energy grid to the highest standards necessary so that no amount of catastrophe will render the United States defenseless by being without energy sources to power our country. This department is mandated to work with the EPA to improve water and air qualities so that every community is furnished with enough clean fresh water so that another episode of what happened and is happening in Flint Michigan will never happen again any where in the United States. The jobs are enormous but to ignore the realities facing our country today put the United States and the rest of the world in jeopardy. These are the purposes and goals of the United States Department of Economic Development.

Development and Limiting Factors of Economic Development in Albania for the Last Three Decades

Based on the data of the last thirty years (one third of the life of the Albanian state) economy in this paper will be presented in reference to significant economic and political factors that affect economic development.

These factors are not object of bias, because of the political system, as no change, except could show a decrease of their influence. But, on the other hand they should not be confused with the factors that impede economic development.

4 development factors (social, economic and political)

1. Mining natural resources and energy resources, as well as a developed system of agriculture and livestock are the elements that are included in this very important factor for the country. Natural resources combined with the geographic location and other development factors give the economy the proper breathing to be developed low cost.

2. Investment in development of assets (infrastructure, emerging industries) is a long-term factor for developing, to reduce the cost of economic activities. Attached to the industry development should never stop the factor of technological development, oriented from government programs. It is the accumulation and capital formation that increases industrial productivity, coupled with the workforce with high skills in terms of its use. The largest role remains to foreign investors, but without underestimating domestic investors, who should see the opening of the economy.

3. The increase of the quantity and quality (value) of labor (human capital) and specifically the part that invest in increasing capacity and improving its quality is a significant factor with a direct impact on economic growth. Of course, the risk of lack from the intervention of government can create problems with the decrease of level of employment.

4. A democratic political environment with a modern institutional framework should be considered as a factor contributing directly through the principle of good governance, which interferes in the regulation of the economy under the laws and rules. Every institution of government has its role in the economy, according to the functions for which is created. Macroeconomic stability reduces the risk of investment and in this context should be considered as a necessary condition in favor of economic growth.

3 limiting factors (political, economic and social)

1. The political instability and uncertain institutions and inflexible in implementing legal system (physical and intellectual property, financial system, taxes), widespread political corruption, poor macroeconomic management, limited economic freedom and limited opening of markets. Reduction of customs tariffs (trade barriers) are a prerequisite in favor of economic growth, through their effect on the function of expanding of markets and increase of penetration of products between countries (especially cross-border ones).

2. Low level of workforce skills, lack of knowledge to the modern technology, lack of political culture, cultural and social, limited labor market

3. Old technology and low investments for its develop, orientation of economy that excludes technology (trade, tourism), investments that doesn’t favor long-term development, and poor infrastructure

Analyze applies to all limiting factors as below, which have been since the early 90s and still continue to be so, the three together over the last two decades.

Based on the combined analysis and the comparative data on the performance of the economy, and the level of influence of factors in the economy of the past thirty years (1980 -2011), if it can be divided into three parts shows that for the first decade there has been a limiting use of the first factor and fourth.

Dominant part of economic development during the first period (1980-1990) consisted of exploitation and processing of mineral natural resources, mainly for export to the extent of 20% of GDP, and the development of agriculture’s for domestic consumption and export to the extent of 55% of GDP. Even government through institutions exercised a strong authority and political stability for economic and social development. Obviously, the impact of only these factors can’t give effect to economic growth, which fell on average by 4 percentage points compared with the average of the previous decade economic development. Lack of freedom of de facto property according to the model of the self-administration for the rural areas was the end of a model that was not to increase the economy, but the opposite. The year 1989 is different (9.8% increase), because being the year that followed the debate a year ago to change the political regime through change of the economy. This historic change was preceded by some initial ways of liberation from the yoke of socialist economy itself. A complete and comprehensive analysis of the factors did not take place even though there are specific analyses of professors of economics.

The second half of the period (1991-2000) is dominated by a use of all the factors, but not coordinated in time and space with each other. Lack of capital continued to be the cause of poverty in the country. This is the period, when natural mineral resources were not part of the new technology investment, in agriculture was not followed by investment for as long as to replace its leadership role in the economy. Freedom of the property was declared, but began to turn into a freedom that ‘kills’. Private property does not become sacred to the economy. In this way, was not achieved the encouragement of the individuals and investors to begin to invest money to maximize their profit in the new economy and to give breathe for long-term perspectives of economy based on property development. But, quite wrong economic direction of political and economic leadership of the time was clearly reflected in allowing the pyramid scheme. All this showed immaturity of leadership to lead the country towards economic development.

But are learned the lessons by the leadership or anybody of them felt the responsibility? Can be feel all quiet now?

Investments in the industry that somehow will have shaped the economy were sporadic and oriented to the politics of the moment, without the proper vision that requires the open economy. Attached with the economic and social situation was the lack of a growth orientation of human resources for training towards a specific industry, excluding initiatives with little weight on the economy through processing of imported raw materials for exporting to European markets (façon contract).

For the third period (the last decade) has been growing interest in natural resources, but increase of political patronage versus the resources of the economy, for own private interest in leadership, today old, did not create any opportunities for the organization and strengthening of investment in extractive industry and agro-industry. Although, the factors have been involved in a discrete mode, where the EU statistics, and of the Albanian institutions show for Foreign Direct Investment funds that reached up to the level of 9% of GDP, the economy does not got the proper quantity of ‘energy’ in order to have a sustainable economic development, based on the coordination of the four factors. So, if it were otherwise, then the economy will had a continuing growth trend. But, in fact the decline of growth happened for at least the last four years. The largest increase was in 2008 (7.5% increase) and immediately in following year the growth was slowed down and was less than half (3.3% increase), without changing of external factors, or internal. The economy did not had an immediate effect from the non coordination of the factors. In segments of industry and government the ideas were misused in favor of the private interests of fictitious economic elite.

The coming years should serve as a prelude to the start of the project to long-term sustainable economic development (economic policy) of Albania of tomorrow, based on the model that passes through the four points above, as a theorem that is implemented from all states already, seeking development through the model.

Lessons on Cultural Led Economic Development Practice 2010

Since the mid 1990s, two worlds have been somewhat reluctantly colliding. Far from this being a universal and magical cosmic event, the fusion of culture into economic regeneration has been controversial and has split opinion on both sides.

“Mozart is Mozart because of his music and not because he created a tourist industry in Salzburg…. Picasso is important because he taught a century new ways of looking at objects and not because his paintings in the Bilbao Guggenheim Museum are regenerating an otherwise derelict northern Spanish port…..” John Tusa, as Chairman of the University of Arts (1999)

Whilst some in the cultural sector feared being swallowed up into the mainstream and a watering down of artistic integrity by buying into wider agendas, many with a traditional economic perspective espoused that the cultural sector is not a major driver for economic growth as it generates little new wealth and is a by-product of people having more disposable income and more leisure time.

Historically, it has been difficult to quantify the value of artistic goods, as value is often derived entirely from the perception of the buyer, museum/gallery or critic, which makes it difficult to calculate potential returns on investment. Many artistic goods such as films or performances have very high investment costs up front and relatively short life spans with which to generate a return, hence the concern behind the planned demise of the UK Film Council. This makes it extremely hard to calculate what the demand for particular artistic goods might be and increases the risks on investment (the historic reason why much investment in the arts is in the form of public sector or charitable grants).

Long standing economic arguments about the role of culture in economic development have also criticised the levels of public subsidy required within the sector. There is a view that subsidy to the arts is largely geared towards audiences that are relatively well off, and that it is neither broadening the ‘market place’ place for the arts, nor acting as a genuinely re-distributive form of public investment. More commonly this argument centres on the suggestion that resources may be more productive if invested elsewhere within the economy, for example in manufacturing.

Throughout the 1990s however, there was a growing discourse about the role culture could play in Economic Development and Regeneration. As the millennium wore on the service sector increasingly globalised, technology turned information into products and the consumption economy expanded. On the back of change and momentum, the Economic Development profession began to buzz with a growing interest and appreciation of the creative and cultural industries, which seemed to epitomise a new regional economic confidence.

Across the UK, cultural and regeneration agencies invested in upgraded and new iconic cultural facilities, very noticeably in the Midlands. To name but a few examples, the Midland Arts Centre in Birmingham, Curve in Leicester, Nottingham Contemporary and Broadway Cinema in Nottingham, QUAD in Derby and The Public in West Bromwich. New cultural quarters were designated; major festivals initiated and public spaces upgraded which, assisted by a loosening of licensing laws, were colonised by coffee shops and trendy bars.

The creative sector was increasingly seen as the spearhead of the knowledge-based post-industrial economy, with booming exports in popular culture built around Brit flicks, music and broadcasting. Universities up and down the country developed new courses in Computer Games Design, Popular Music and Cultural Economy studies. Richard Florida became an economic guru and the economic development profession toyed with how to attract the creative classes to their back yards.

However, during the cultural regeneration heyday, some across the cultural sector overlooked the need to address underlying economic narratives and radically transform a generally weak and intangible evidence base. We now find that the good old days of public sector cultural investment are being increasingly consigned to history. The creative industries across the board have suffered markedly from the recession, many cultural venues and attractions are looking at life on the brink over the next few years and the big wheels and outdoor ice rinks that have graced our public spaces may not be a long term feature.

Since the recession, it is easy to re-appraise much of this investment as having being built on shaky foundations. Personal disposable income has fallen off drastically and what was an everyday activity such as a trip to the theatre now seems more like a luxury treat. The squeeze on the public purse is major knock-on effect on a broad range of cultural attractions. Now, as a double whammy, public investment is looking like being a second ‘financial lemming’, with budget cuts looming from both Local Authorities and the cultural agencies that so far have survived the quango shuffling at Whitehall.

Subsequently, a renewed clamour has begun to prove the economic value of the cultural sector. However, in dusting off many of the original business plans, maximising economic impact was often seen as an add-on to the project, not its raison d’etre. A paucity of locally based evidence meant extrapolations from national data sets were the norm, allowing creative accounting in calculating some of the impacts. The evidence of impact has either been brash arguments with little evidence, or brash evidence with little argument. This has allowed the age old economic arguments to resurface about a Cinderella sector having little place in a serious 21st century economy.

In the brave new world of ‘doing something with nothing’ economic development, it is all too easy to throw out the baby with the bath water. Our ‘new’ economic paradigm revolves around exports to emerging markets, wealth generation and job creation, welfare to work reform, a high tech manufacturing renaissance, economic localism and a strong third sector delivering public services.

The truth is of course, apart from rhetoric, micro economic policy has changed little; therefore all the potential that the creative and cultural sector can offer hasn’t dissipated either. Manufacturing still needs high quality design and cultural resonance, the new ‘staycation’ phenomenon will need more than just a good donkey ride and a stick of rock to attract high spending urban elites and in terms of encouraging exports to emerging markets, we can no longer bank on Cool Britannia or a reputation for building successful global companies such as British Airways, BP and RBS to get us a gig! The starting point for our reputation within developing nations has never been fantastic and now we are classed as one of the main exporters of the current economic crisis.

The fact of the matter is now we have some serious economic questions to answer; there probably hasn’t been a time that the creative and cultural sectors have been more important to national and local economies. When the inevitable creative destruction process has subsided, the remaining leaner and meaner cultural and creative sector ought to be a massive asset to our profession.

Culture and creativity still has a major role to play in defining the distinctiveness and quality of place, particularly as once again, the Midlands and northern Britain de-regionalise and fight for attention from under the shadow of London. Within the annual Place Survey, culture is always seen as a major priority for investment, especially in the more affluent localities within the Midlands. Whilst this may be a reflection of social harmony and a more educated electorate, it does also reflect a thirst for a rich and varied cultural life from the regional bourgeoisies.

It is also often overlooked that, probably with the exception of a certain Swedish furniture shop, catchments for leisure purposes are much broader than those for retail. Cultural and leisure facilities, along with festivals and events, have a major role to play in re-positioning and attracting new audiences back into city centres, including those that were lost before the recession. Many cultural venues have shown significant innovation to sustain and develop audiences during the recession. S4W’s work with Derby Festé is providing new and localised evidence to articulate the role the festival is playing in attracting occasional visitors into the city centre from areas that really should be well within Derby’s retail catchment.

Creativity and innovation will also need to be revisited if tailored exports to new markets are to be an enhanced economic platform for the future. Products and services will need to be responsive to new circumstances and a new emphasis on design within supply chains will be critical. In terms of the Creative Industries, 78% of firms within the sector are active innovators with 52% attributing increases in their turnover to new and improved products, compared to 40% for other sectors (Creative Britain: New Talents for the New Economy (2008)). Cultural exchange will also be critical in opening up new markets, either in terms of attracting inward investment (these days just as likely to be overseas students) or outward missions.

Equally in terms of enterprise, where there is a clear and sustainable market opportunity, the creative sector represents an opportunity to increase the local enterprise base as businesses are increasingly outward focused and are actors in national and international markets. There are also high rates of self employment within the sector (in the East Midlands it has been estimated at 25% of the business base). From an economic development perspective, this traditionally has been seen as a structural weakness, but may provide a latent talent pool from which to develop and grow larger businesses from sole traders. In terms of working with our ‘doing something with nothing’ profession – a sector that has low barriers to entry, soaks up skilled labour and is not dependent on expensive imports to complete its product/service offer – ought to be an attention grabber!