One more from the Economic Development bizzaro-world . . .
Yesterday, the WSJ editorialized AGAINST a preference for local purchasing. What? Did they forget to check in with their friends at the Common Sense Coalition and the Chamber of Commerce? Only they could twist an initiative to assist local small businesses into an anti-business initiative. My guess is, that once again, they know NOTHING about the facts of the topic of which they write.
I heard a statistic the other day that 80% of the jobs created are created in companies or businesses with less than 20 employees. It would seem that job creation could be enhanced locally by supporting these small local businesses. It would seem this should be a no-brainer. More local business = More local jobs. Ferchristsake, Russ Frank and the Common Sense Coaltion and the Mayor and I agree on this one! So what’s the WSJ’s beef? Here’s a few comments I have about their editorial.
1. They start off with calling this another government regulation and they end by calling it a “mandate” for local businesses. It’s quite the opposite. It’s opening up opportunity for local businesses, not requiring them to do anything. It’s a way to give local businesses a competitive edge.
2. They assume that this will cost the taxpayer more money, or least want the taxpayer to fear that might be the case. Ummm . . . if they had taken 2 seconds to talk to anyone involved, they would have known that a local preference could be simply that local vendors are allowed to match the lowest bid. But of course, instead, they sound the alarms and assume the worst.
3. My favorite out-of-touch-with-reality statement from the WSJ was this:
But such a parochial policy ignores the realities of an increasingly global economy. It also could lead to retaliatory measures in other cities, hurting the many businesses in Madison that sell elsewhere.
I laughed about this one with a member of the EDC (Economic Development Commission) yesterday. What do they think, businesses in London will stop doing business with folks from Madison because of this policy? This cracks me up. Did Madison stop doing business with businesses in New York City because they implemented a similar policy? I mean, do they have any proof that anything like this has happened? Anywhere? Ever? Where’s their, um, evidence?
4. They also claim:
On top of that, there’s next to no evidence that favoring local businesses for municipal contracts is needed.
Alright, this too, is humorous. “Needed”? Probably not. Good for the local economy, definitely. It doesn’t take a doctorate in economics to figure out that money spent in the local economy that then stays in the local economy instead of being shipped to another state helps the local economy. I mean, should we be buying things from Walmart if we can purchase them from a local vendor who uses a local attorney and a local accountant and hires local people to do adminsitrative tasks? And if the local businesses get more business, they may hire more employees and create local jobs. Isn’t that what the WSJ editorial board has been whining about for the last few years. More importantly, isn’t that what we want in our community?
5. The next uninformed statement they make is:
The city already spends 60 percent of that money on vendors with city addresses, according to city purchasing staff. An additional 6 percent goes to vendors within Dane County.
That means about two-thirds of city spending is already buying locally.
Um . . .yes, Walmart and Office Depot and Office Max and all kinds of other vendors have local addresses, but is that really buying locally? I think not. Anyone who thought about this for more than a moment would have figured that out. This statistic they use is absurd when interpreted the way the WSJ did and even the Comptroller was quick to point out this flaw in that statistic when making his presentation to the EDC.
6. Next, they make this statement:
* Many products such as city buses and fire trucks are not manufactured locally.
* Other products, such as computers, are purchased through a state buying pool to save local governments significant time and money.
I’m not sure what this is supposed to add to their argument. Obviously, this is just a preference for local vendors and as I said earlier, if there is no local vendor that wants to match the lowest bid, we’ll go with the lowest bid. This is a preference for local businesses, not a mandate to buy from local businesses. And for some things like city busses and fire trucks, likely we won’t have any local vendors, but if a company moves into one of our industrial parks that makes firetrucks, I sure hope we try to help that business get started and thrive and buy our firetrucks from them if they can be compete and match a lowest bid.
7. The final statement they make that I want to address is:
The way to succeed in the modern economy is to hustle and to innovate, to produce and to market quality products with added value that attract customers no matter where they may be.
Hmmmm . . . this doesn’t square with their mantra that local government isn’t doing enough to help the local economy. This statement seems to to say that success in business can be accomplished without the help of local govenment. So which is it? I guess they don’t have to be consistent in their arguments.
Honestly, is Sunny Shubert back working for the State Journal editorial board? At least her over-the-top type editorial would have been fun to read.
