“Other People’s Money” – StL-Style
On Wednesday, Macy’s Department Stores announced that it will cut 850 jobs and close its Midwest regional headquarters in St. Louis.
The Post-Dispatch opined on the subject in this morning’s paper. And while the editorial has some merit (a discussion of the need for a well-educated work force, public safety, etc.), it slips into xenocentric regional pride:
Whatever the reason, the loss of a corporate headquarters does hurt the region, and the hurt goes beyond the loss of jobs. There’s a loss of regional pride and bragging rights. Local development officials have a tougher job in recruiting new business for St. Louis. […]
Cities may score an occasional coup by luring a factory or headquarters from out of town. But most regional economic success is home-grown. It means spawning small companies and helping them grow into large ones.
No, no, no. Wrong. Cities shouldn’t promote “home-grown” industries for the sole purpose of familiarity and pride (I mean, look at Detroit). It’s the city’s responsibility to promote a healthy business environment, one that’s fair and competitive. We don’t live in a compartmentalized world of “regional economic success.” Think of the increases in standards of living during the past 50 years. How lucky are the citizens of St. Louis that they aren’t forced to rely solely on their own regional production? The mobility of capital and labor has made St. Louis a much more vibrant and economically healthy place than it ever was before. The increases in material wealth, broad home ownership, the availability of cheap food, clothing, and consumer electronics: Were those things obtained from erecting tall city walls to keep the rest of the world out? Or did the increase in competition from across the world bring prosperity to all?
What ever happened to the fur industry and river shipping? The railroad and meat packing? The buggy builders and the blacksmiths? Is St. Louis worse off because those jobs are now gone? What about the pride of those workers and the city’s roots?
Industries are born and industries die. Jobs are lost and jobs are created. That’s part of growth. The St. Louis region netted 25,000 new jobs last year, a 2 percent gain. Those jobs were created because capital was allocated to the areas where it was most productive, not because bureaucrats squandered it into industries slowly bleeding to death on taxpayer subsidies.
Do I sympathize with those who lost their jobs? Of course, we all should. But how lucky are they that they live in a world where competition ensures that their family’s next grocery bill will be only $100 instead of $400? They live in a world that encourages growth a world which will offer them new jobs and opportunities.
In summary, I end with a quote from the classic 1991 film “Other People’s Money”:
“This company is dead. I didn’t kill it. Don’t blame me. It was dead when I got here. […] Let’s have the intelligence, let’s have the decency to sign the death certificate, collect the insurance, and invest in something with a future. ‘Ah, but we can’t,’ goes the prayer. ‘We can’t because we have responsibility, a responsibility to our employees, to our community. What will happen to them?’ I got two words for that: Who cares? Care about them? Why? They didn’t care about you. They sucked you dry. You have no responsibility to them. Take the money. Invest it somewhere else. Maybe, maybe you’ll get lucky and it’ll be used productively. And if it is, you’ll create new jobs and provide a service for the economy and, God forbid, even make a few bucks for yourselves.”