Reader Response: Questions about a New Industrialism

A few posts down, you can read about a celebration of the oldest continuously operated oil refinery in the United States. Keep scrolling for more on another "dinosaur" industry, Big Steel. Or don't. I only bring it up because that oil post prompted an excellent question from a reader, which I hope to address here. In edited form:

Can we reduce this to Tarzan logic? Steel good. Oil bad. Ever notice that all those steel mills sat hard on the banks of every river in this region and dumped stuff in them for nearly a century. As I kid, I used to sit in a Baden department store and watch carloads full of hot slag dumped in the Ohio. Sure people were earning big bucks...but what were the folks downstream drinking?

First, I apologize if I gave the impression that I think "Steel good. Oil bad." Only a fool would argue that steel was an unmitigated good. It was dirty. For a good part of its history it didn't pay workers well. And it didn't last long after it started paying workers well. As for oil, I did not mean to imply that it is "bad." In fact, quite the opposite. Yes, it is dirty and a creek runs right through the refinery. But we need oil. Or at least we want it. I meant the post as a compliment to ARG for not sugarcoating the reality of what a refinery actually looks like.

Moving on to the rest of the question:

I might have missed a core beliefs on this blog somewhere but what exactly is the new industrialism -- and how does it help people and economies without harming the environment and people?

Glad to clarify, if I can. Let me begin with this, an article in today's Bradford Era discussing the fact that the rural counties in Northwestern Pennsylvania, which also happen to be heavily industrial, are losing population at quite a clip. (Except Forest County where, tragically in my opinion, they keep building prisons.) At any rate, a McKean County official has this to say:

"We can't continue on a downward path for many years into the future or the citizens of the county won't be able to support their governments," McKean County Commissioner Chairman John Egbert said in response to a population analysis done by the Pennsylvania State Data Center in Harrisburg and released Thursday. "To have a meaningful hit for the county, we need to attract large numbers of young people in the high tech business."

Look, I am all for diversifying the economy, but what is really being proposed here? Is Bradford going to become the next Silicon Valley? It is preposterous enough when every mid-sized burg in the country claims to be the next great high-tech haven. But Bradford? I am not saying they can't modernize, but what's the end game here? If Pittsburgh still isn't the next Seattle, despite the presence of an economic development gem like Carnegie Mellon... well, I think you get the point. But more from the article:

"In today's world, I think you have to recognize that industrial development is a new game," Egbert said. "The 'old world industries' of 10 or 20 years ago typically aren't expanding. Those businesses are relatively stagnant and the growth is in the service and technological world.

"We'd love to find somebody that would bring 200 jobs to McKean County, but that isn't happening right now."

Well, actually, the oil refinery in Warren is expanding. A lot. And even in this article, there is a mention of the drive to bring secondary wood manufacturing back to the area to capitalize on the region's fantastically valuable black cherry trees. Which brings me to my next point.

The CBS Early Show recently (yesterday) ran an extended feature on the Ridgway Chainsaw Carving Rendezvous, which I have written about extensively. Julie Chen even showed up and tried to carve a bear. Here's what she had to say about my hometown:

What Chen learned in Ridgway is that the town was built on wood. At the turn of the century, a thriving lumber industry created more millionaires per capita there than in any other U.S. town.

Though a small lumber industry still exists, Ridgway might be better known for what can be carved from the wood — everything from bears to birds to the downright bizarre.

A small lumber industry still exists? That's not unlike a recent article saying, erroneously, that there are no smokestacks left in Pittsburgh.

I love the Rendezvous. But to say that the region's lumber industry is "small" is exactly wrong. Northwestern Pennsylvania has one of the most valuable stands of hardwood. Anywhere. In. The World.

Anywhere.

The world.

That is not small.

Yes, it would be foolish to put all of the region's economic eggs in that one basket. But is anyone trying to do that? I am not aware of any.

So what does the "New Industrialism" look like? Well, its an economic and social regime that looks forward, but in a way that stops trying to act like the old one is completely gone. There are still smokestacks in Pittsburgh. And there is still timber in the woods. I say try to take advantage of ALL of the region's resources--the computer geeks in Pittsburgh and the wood hicks in Kane--to make this a place that is open to a wide array of people, lifestyles and economies.

This is a proposition that must preclude undue economic nostalgia. No, Big Steel is never going to sustain an entire generation of families like it once did. And we do have to guard against the environmental degradation that often accompanies such industries. But let's not write them off just yet.

And that's what I think is happening. People who cut trees and make steel and refine oil are becoming economic pariahs. People want their gasoline for 85 cents a gallon and their black cherry kitchen cabinets equally cheap, but as soon as they see a refinery or a smokestack or a logging job they hold up their noses, or go shiver underneath their membership cards to the Sierra Club and hope it all just goes away.

That's not a realistic attitude. Nor a healthy one.

Yes, guard the environment. But do so in a way the recognizes reality. And maybe even celebrates it.

Yes, seek high-tech industries. But in a way that recognizes the need for stuff.

Maybe that doesn't make any sense at all. Does to me though. At least this morning. I reserve the right to act like it never happened.

At any rate, thanks for the provocative question, Sean.

Thoughts? Anyone?

Comments

[sean mcdaniel]

I appreciate the explanation of the new industrialism. Sometimes I have a hard time determining what a lot of bloggers beliefs might be. Sometimes you might get a little adamant (such as why people live in McMansions), but you are willing to discuss rather than dismiss differing opinions. The truth is, that oil and other big industries are becoming better corporate citizens, if for no other reason than they want to avoid the PR hassles, fines, lost business, etc., of spills and other environmental problems. Another reason is that many of the people who working in those industries realize that unsafe practices can harm the environment, workers and even them and their families.

We've discussed before what seems to be a conflict between beliefs and actions. That's bound to happen in this world. But I agree that you can't park your three cars in the garage of your 3,000 square foot home and then complain about what Bush and his ilk are doing to the world we live in.

I'm all for creating industrial jobs here in the region and throughout America that might revive what was once a healthy blue collar middle class. Those jobs led to the creation of white collar jobs and will make the area and even better place to live (and I think it's got plenty to crow about now.)

[Fred Mullner]

Sean's comment that, "oil and other big industries are becoming better corporate citizens..." sparked a thought that I wanted to share.

Sean is certainly correct. I am an environmental engineer who works in industry, and I'm the guy trying to make industries better corporate citizens. That being said, I've noticed a pervasive attitude among the public that an industry must be a good citizen if it wants to retain the privilege of operating. As a matter of fact it does not. Industry has no obligation to be a good neighbor or a good citizen anymore than you or I do. Should we? Well, that would certainly be nice, but must we? No. We all have to obey the law, but that's where our obligations end.

In ARG's case, they've been in Bradford longer than anyone else. Everyone who lives near the refinery made a choice to live there, and if the refinery's presence is unbearable they should move. While that may sound elitist, the alternative of "do-what-I-tell-you-or-I'll-make-trouble" is nothing more than a crass form of rent-seeking.

Industry has a fundamental right to exist, and we ought to defend it on philosophical grounds. Industrial production is a magnificent manifestation of man's ability to think, act, and create. To give that up because it's ugly, dirty, or inconvenient is a tragedy.

[sean mcdaniel]

Actually, I do think industry and commercial ventures of all types (McDonald's, Macy's, Giant Eagle) have a resonsibility to be good corporate citizens. Many businesses get attractive tax breaks from government at all levels. So making sure that you don't harm the people (and their towns) who foot that bill is nice way of saying thank you. As for refineries not being attractive places, well, it might be tough to find many beholders whose eyes find them beautiful. Then again, most people don't want to see the processes that lead to that gallon of gas they pump into their cars. Just as they don't want to know what happens to that chicken on the Sunday dinner table. Ugly, dirty and inconvenient...let's give those people behind the "magnificient manifestation of man's ability to think, act and create" more opportunities to be magnificient again by changing and improving industry's production methods so that we can find three better adjectives than those that begin this sentence.

You know, I love to cook. And I can create a big mess in the kitchen so that my meal turns out well. But I clean up spills; dispose of trash properly; wash my hands after handling raw meat; and scrub the dishes so that they are safe to use again. I think industry can do the same.

[Sam M]

All,

Thanks for the good discussion.

Mr. Mullner poses an interesting point. I don't think he is saying that the industries should not be clean. I think he is saying that there are laws regarding "cleanness," and the companies are required to follow those laws. And that apart from that, they don't owe communities anything "extra." They are already offering jobs, property taxes, etc.

That makes sense to me in a certain way. I think something similar whenever one of my employers does something "extra" for us. Like distributes a turkey on Christmas, or has a summer picnic so we can all socialize. Maybe I am a crusty old fool, but I always think, "Thanks, but no thanks. Don't bother. Take whatever this cost, divide it by the number of employees and write me a check."

Similarly, when a company like Ford announces some multi-million dollar literacy initiative, I start to think, "Man, that is so much public relations BS. I own a Ford Focus. Would it have cost $11,000 instead of $12,000 if they wouod have laid off the nicey-nice?" Same goes for, say, WalMart. What is the best way for them to be good neighbors? Build a playground, or reduce the cost of their toilet paper by six cents? I think you can make the case either way. Or distribute those six cents to investors?

Maybe that's short-sighted, but it does occur to me from time to time, I have to admit.

What's even more interesting to me is that the way things are structured today, a lot of policies and expectations could, I suppose, be filtering investment away from traditional industries. Hear me out: When Target or Starbucks or some new condo development wants to start something in the Pittsburgh area, they often garner "tax increment financing" to help them along. That means they get to keep whatever they would have paid in local taxes. Say it's something like 10 percent. Well, that takes a lot of the burden off their bottom line. If the business model calls for a 30 percent margin to survive, that's all they have to generate. A 30 percent margin.

Now take the case of some "dinosaur" factory built in the 1950s. They can't easily move the factory. They are captives of local officials, who would never dream of cutting their taxes. So to make that same 30 percent margin after axes, they have to make 40 percent BEFORE taxes.

Where are you going to invest?

And to Mr. Mullner's point: If these people are already paying wages and school and property taxes, and have been doing so for years, maybe our expectations for "something extra" ought to change accordingly.

I think the existence of strange "public-private" ventures like the one that supported the Waterfront shoppping mecca muddy the waters a lot. Private developers and their champions in the local development offices promised that the thing would revitalize Homestead. Only the thing doesn't generate much tax revenue. In those cases I do think the developers have a positive responsibility to contribute something. And I think these people recognize the need for that from a public relations standpoint. My problem is that they come across as so darn "generous" when they present their big checks to the community centers. All the while, the old dinosaurs keep contributing the low-key way: property taxes.

Of course, this all assumes that these "old" industries are following pollution and other laws in the first place. Some people argue that they don't. I think that Sean's initial point was that they appear to be doing a better job of that. Is that due to better laws, better enforcement or a shift in the companies' PR? Maybe it's a mix.

At any rate, thanks again to Mssrs. Mullner and McDaniel.