Economic Development Department Is Important for Louisiana’s Future

For some strange reason, a handful of Louisiana Republicans cannot understand that when you’re trying to attract a German steel company or a Japanese car company to Louisiana, you typically have to fly to Japan and Germany, meet with the individuals behind those companies, and attempt to put together a deal. Secretary Michael Olivier has traveled across the world in an attempt to bring commerce and industry to Louisiana. He and his department have a consistent track record of placing Louisiana in the short list for a string of mega-billion dollar projects, many of whom were hampered by the hurricanes and intransigence of a group of anti-Blanco Republicans (individuals who excused their votes against positive progress as a mere representation of their “lack of faith” in Blanco’s leadership). That said, despite the inherent difficulties of attracting large industries to a State plagued by the devastation of two catastrophic hurricanes and despite the sudden politicization of statewide economic development, Olivier and his department have continued to work for the entire State. And their efforts have led to tangible results:

Their coordination was absolutely critical in securing Union Tank Car’s new plant in Alexandria. Some may want to go back to Foster in order to retroactively reward credit, but this is entirely disingenuous. The L.E.D.’s efforts led to the creation of over 730 direct jobs and 1,300 indirect jobs.
Last year alone, Rapides Parish took over 1,800 people off of their unemployment rolls, and our unemployment rate dropped substantially. Check my numbers with LAWorks and the Census; they are accurate.
During the past four years, the eleven parish region comprising Central Louisiana took over 5,000 people off of their unemployment rolls, and its unemployment rate dropped substantially.
And I have only studied Central Louisiana numbers. Perhaps we are unique, though. But maybe it’s not too surprising, considering how politicized “development” has become after the hurricanes.

It’s difficult to blame Olivier for our collective failures. But even if one does blame Olivier, the concept behind the Economic Development Department is fundamentally sound. Louisiana businesses and prospective businesses are currently swimming in a murky sea of targeted tax credits, renewal zone incentives, Go-Zone incentives, and industry-specific depreciation write-offs. At its very least, the Louisiana Economic Development Department should function as an information resource and a networking tool for businesses thinking about locating in Louisiana. But at its best, the department can pro-actively work to attract industry, create or facilitate the creation of unique incentives packages, and mediate between State and local governments on development issues.

In a State ranked dead last in practically every major quality of life survey, a State that continues to be crippled by poverty, a State still recovering from two historic natural disasters, a State in which everyone is either underpaid or uninsured or both, why wouldn’t we want a full-time department of highly-qualified individuals all committed toward attracting new, higher-paying businesses and industries to the State?

Yet some Republicans are now calling for Governor-elect Jindal to fire Olivier and completely eliminate the Louisiana Economic Development Department. Chad Rogers of the popular website, The Dead Pelican, is now espousing those views, and a handful of Republican bloggers almost automatically caught on.

Their main arguments:

1) Olivier flied a lot.

2) Oliver=Blanco; Blanco=ineffective; the entire L.E.D. and Olivier= ineffective.

3) “Government has no place in economic development or job creation.” -Chad Rogers.

Please allow me to respond to Chad: Yes, yes it does. You cannot create a single job without being forced to oblige by the laws and regulations enforced by the government. In some cases, government doesn’t just have a place; it sits at the head of the table. And I know, perhaps some of you Republicans and Libertarians may also believe that government shouldn’t even have a place at the table discussing economic development in their State, but I believe that such efforts can, at their best, help to forge constructive relationships and curb exploitative practices… but at its worst, I suppose the department could merely become the mouthpiece of established Louisiana big businesses…. Great…. I definitely can’t see that happening. On second thought, maybe we should eliminate the department….

Responses

Greg Aymond

November 8, 2007

Lamar, to make a concrete evaluation of Olivier’s success, it would seem logical to compare his expenditures to how much he actually brought into the state through his efforts. As to Union Tank Car, how much did we spend through all of the politicians who claim credit for that one?

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Drew Ward

November 8, 2007

I’ve occasionally looked at the Dept of Economic Development’s website with particular attention paid to the job listings. This was more out of curiosity than anything else, as while living in Germany and hearing of the state’s attempt to lure a German company to Louisiana, I heard no mention of how this marketing or promotion was being undertaken.

Namely, I was curious as to whether we were using German’s to market our state to German companies. I could find this information nowhere on the louisiana.gov websites, not could I find a single document in German, nor economic development information in Spanish, Arabic, Chinese, or any of the other primary languages of our potential international economic partners.

So this left me wondering, do we have a bunch of politically connected cotton farmers and oilmen marketing our state or do we actually have specialists in international markets working to promote Louisiana?

Does anyone know? Despite what may be taught at local universities, when it actually comes to the real world, good old boy politics and foot-in-the-door tactics don’t stop at the state line. If our state is to effectively compete with other locales, we need native German’s marketing us to Germany/Austria/Switzerland, Chinese agents marketing us in China, Mexicans in Mexico, etc.

We need people who can not only recognize our own states unique marketability, but also are aware of the challenges and intricacies of promoting our state on an international stage.

We have a terrible reputation around the world as Americans in that we tend to remain voluntarily ignorant of anything outside of the scope of our own American lives. It’s unfortunate but true. But in this case, our ignorance of other languages, cultures, and busienss practices are robbing us of valuable economic development opportunities.

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Ryan

November 8, 2007

I wouldn’t go so far as to call Hurricane Katrina a natural disaster, Lamar. I would call it the Federal Flood, as most of the damage in Orleans and St. Bernard parishes would have been avoided had the federal levees not failed. The breaching of the levees can only be charitably described as a failure of engineering.

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Lamar White, Jr

November 8, 2007

Ryan, I agree the devastation brought on by Katrina can be aptly referred to as the federal flood, but I am referring to both hurricanes as natural disasters. We can’t forget about Rita.

Greg, it definitely seems that anyone even remotely connected to landing Union Tank Car wants to take complete credit– which only makes it more difficult for the people who actually worked on the project to rightly claim their role. I am sure that if you added up his expenditures and then compared those with the economic impact of the projects he and his department have worked on, you’d find he earns his keep.

Drew, we are having a hard enough time convincing Louisianans of the importance of traveling abroad to land industry, but I completely agree with you about beefing up our efforts.

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Mike Stagg

November 8, 2007

Yes, Economic Development is important, but Olivier rand LED like Louisiana was Hancock County, Mississippi — where he worked prior to taking the LED job. Nothing particularly wrong with that, except that he recruited dumb.

Case in point: Baton Rouge and the five parishes around it have an ozone pollution problem that is a combination of the interaction between auto exhaust, gases released by chemical plants, and heat. The EPA has either threatened to put the five parishes on a violator list (which would impose certain rules on the region that would drive up the cost of living and doing business there), or is threatening to do so.

One of the first “successes” Olivier claimed was a billion-dollar-plus expansion of Formosan Plastics in Iberville Parish, which is in the five-parish zone and situated such that the prevailing coastal winds will carry pollutants from that plant across the Mississippi River and into Baton Rouge.

Olivier claimed this as a success, although whatever economic impact of the plant will be offset by the negative impact of higher gasoline prices (to cover the cost of new addititives that will go into gasoline in that region) and other air quality restrictions that will be placed on other businesses in the region.

Louisiana needs another chemical plant like it needs a hole in its head — or rising sea levels.

Under the Mike Foster administration, Louisiana had an economic development plan that, at least on paper, made sense. It was called “Louisiana: Vision 2020.” It was the product of a strategic analysis of Louisiana’s economic, demographic and environmental assets and liabilities.

The plan was implemented too late in Foster’s second term to get any real traction and there were problems with the way the program was run in the 18 months or so that it was operational, but it was the right track.

We have to take a longer-term view at who we are and who we want to become and who we can get there. Vision 2020 did that.

The Blanco administration paid lip-service to the plan while abandoning it.

You can find a copy of the plan here:
http://vision2020.louisiana.gov

It’s worth a read. It will be interesting to see if Governor Jindal tries to steer the state back towards that path.

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pointecoupeedemocrat

November 8, 2007

Economic development in Louisiana must come to terms with the following: industries in the rust belt are seeking cheaper labor, and they are looking South and abroad; the consolidation of corporations into multinations has resulted in their localization in five or six American cities; Louisiana’s cities are now competing with cities such as Charlotte, Houston, Atlanta and Dallas; and the economy under Bush is stagnant as a result of reckless speculation and the decrease of the US Dollar’s worth. This leaves one with very few opportunities.

Regarding Formosa Plastics, I agree with Stagg. Cancer Alley is already an environmental disaster, and this will only exacerbate it. But so will any factory placed on the Mississippi River south of West Baton Rouge Parish. Also problematic is this proposed loop that will cut through the rural parishes surrounding EBR. New forms of urban planning must be considered.

We must create more manufacturing jobs, unless we want to increase social stratification. I mention this, as this is the case in other New South cities, where an upper middle class tied to a certain industry is literally separated from the lower middle and lower classes who have no economic opportunities. To further bifurcate the state along economic lines would already exacerbate highly visible divisions between a few wealthy parishes and the rest of us. This is why expanding manufacturing and other blue collar industries remains important.

But other industries must be cultivated. The problem, of course, is the desire of states such as Michigan and Ohio to attract such industries. One way to address this problem is to have any economic development coordinator work with Mitch Landrieu in order to create a comprehensive package with which to lure white collar industries to the state. But in luring such industries, one has to choose cities outside of Orleans metro and EBR parish in which to locate such industries and corporations. That development has been so uneven, and that wealth is concentrated in five parishes, including Lafayette, is a problem we must address.

But the approach must include two prongs, unless, of course, one wants a hermetic class of wealthy New Yorkers who all work for one or two corporations to colonize the state and not share the wealth with the rest of us. This is why manufacturing in some form is important.

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Lamar White, Jr

November 8, 2007

Thanks Mike. I will definitely read the plan, and I appreciate your comments. I agree: Louisiana is definitely not in desperate need of another chemical plant.

I also hope Jindal will ignore those who believe in the destruction of this department and consider taking a longer-term view.

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newbie101

November 9, 2007

In beginning to follow politics late in life, I apologize in advance if the following questions/comments come off as elementary or stupid.

First, do you feel that part of the reason that the German Plant went to Alabama rather than Louisiana was partially due to not only the package that Alabama offered but the concerted hard-nosed campaigning on Alabama’s behalf by Mississippi officials and Florida officials especially through the media? Many who perpetuated the ‘Louisiana Corruption and Ineffectiveness’ mantra?

Also, speaking of the ‘Louisiana History of Corruption and’ mantra’; does anyone know exactly ‘who’ this is supposed to be about? I was struck when that became the campaign slogan of the past election especially since no one had ever mentioned that Gov Blanco was ‘corrupt’ prior to Katrina/Rita, or even after and she had only been Gov. since 2004. And the previous Gov had been Mike Foster (R) for the 8 yrs prior, which the current Gov elect was a major player and surely wasn’t accusing that administration of corruption. Also I could find no ‘List’ that proclaimed LA as the ‘most corrupt state’…I found this curious although even the State Media and publications repeated the quote quite often since Katrina, along with national media and politicians. It amazes me that the ‘man on the street’ will rail about the corrupt politics of LA but when asked for further info, the common name is either Jefferson or Edwin or that ‘Insurance Guy’. I will admit there are some colorful historical politicians but not more or any worse than you read about any other state.

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newbie101

November 9, 2007

Ryan, the Wikipedia entry on the Federal Levee failures in NOLA only focuses on that one condition that Louisiana faced. Katrina was a major hurricane that hit s.e. Louisiana and caused considerable damages throughout the region, even though the eyewall did not make a direct hit on NOLA, it still caused considerable damage throughout the city, the coastal regions and surrounding areas, prior to its moving to MS. The damage of this natural disaster was then compounded by the failure of the Federal levee system which caused catastrophic flooding in 80% of the City and surrounding communities that caused the complete shut down of much of the entire area for a period of time. Three weeks later another major hurricane, Rita, struck the s.w. region of Louisiana causing additional devastation for LA citizens.

IMHO I believe alot of the publc both in state and out of state have been misled by the believe that the problem is only with a certain area of NOLA being damaged by the flood from the federal levee failure and is only a concern for a few, especially when reading comments from many politicians from other parts of the state and items on the web. All one has to do is to take a tour of the devastated areas and realize the consequences on so many facets of the social factor of people from all walks of life, business factor, (public & private), education, healthcare, economic factor, industry factor, energy factor on and on that one can only imagine what detriment this will eventually contribute to the rest of Louisiana & total numbers as the negative effects creep slowly into other parts of the State if they are not addressed soon in a concerted effort by many. From my readings, it seems the misconceptions of the devastation combined with the fact that LA has had to ‘compete’ with the states of MS, AL & Fl for Katrina & Levee Failures funds and compete with TX for Rita funds and FL’s Wilma funds for federal relief monies because all the funds were placed in a combined ‘2005 Hurricane Funds’, rather than the widely believed notion that NOLA & LA has received ‘all’ the funding has contributed to the slow recovery and hesitancy for outside business interests to make the move to LA.

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Bird

November 9, 2007

As someone who is very close to the UTLX project and has had numerous conversations regarding the steel mill with the consultants who ran the project, let me just say this – there is plenty that has not been made public and probably never will be. As a result the perceptions will remain exactly what has been posted here on this site.

Olivier has ran around the globe promoting Louisiana, has done so in many languages even though those documents don’t appear on their website. We do have agents in Asia, Mexico and Europe.

20/20 is a vision, not a road map. It is not a 12 step plan spelled out on how to improve the state. It’s ideas and concepts left for interpretation. The current administration has completely ignored it, just as they have ignored most of the state, choosing to concentrate on the “impact” areas and northeast Louisiana. Why? Because Central and Northwest Louisiana could take care of themselves and we were achieving economically.

LED does not cooridinate with the Lt. Gov’s office nor do they coordinate with Dept of Ag, Dept of Labor, Dept of Education, etc. Therein lies much of the problem. While Blanco told all of her cabinet heads they were each responsible for economic development, true coordination and partnering of the departments almost never occurred during this administration. I would hope this changes under Jindal.

Louisiana has economic success thanks to local developers, not because people in Baton Rouge are doing their job. Locals work hand in hand with Baton Rouge to sell our state and sell our communities, often developing the leads ourselves. Baton Rouge becomes the support mechanism. This needs to continue, but at the same time, Baton Rouge needs to be proactive in its support of existing businesses and attracting new businesses. We cannot sit back and wait for someone to knock on our door. That is one thing the locals understand.

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Bird

November 9, 2007

Sorry for the typos guys.

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Lamar White, Jr

November 9, 2007

Bird, I think I have a good idea of who you are, and thank you for sharing your insight about the LED and UTLX. 😉

You make an excellent point about coordination. I also hope the Jindal administration can learn about the problems that prevented things from being as efficient as productive as possible.

I really am not qualified to speak about Olivier’s performance (except to say that he has always been responsive to us), but I do believe it would be stupid for us to destroy the department simply because some Republicans don’t like Olivier.

And to newbie101:

“First, do you feel that part of the reason that the German Plant went to Alabama rather than Louisiana was partially due to not only the package that Alabama offered but the concerted hard-nosed campaigning on Alabama’s behalf by Mississippi officials and Florida officials especially through the media? Many who perpetuated the ‘Louisiana Corruption and Ineffectiveness’ mantra?”

I’ve heard a number of different reasons we lost the plant, the most common of which is that it was due to our utilities package. Perhaps someone else can better elaborate.

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Bird

November 9, 2007

Utilities played a small role in the ultimate decision. The cost to develop the site was another. Reality – the perception that there was not enough people to draw a qualified labor force from didn’t help. Almost two years after Katrina and during the midst of the decision I was are there really people in New Orleans?

If there is one fault I can put at Olivier and his staff’s door, it’s this – they are still on the gloom and doom tour. We need to be celebrating successes in South Louisiana. People across the US and the globe need to know companies have come back to the state, new investment has been attracted and families are returning home inspite of issues related to the Road Home and providing affordable housing. We have not sold the successes of our recovery well. That in itself is part and partial to the loss of the steel mill and other projects. All you have to do is sit down with a few consultants and have a frank discuss with them whether it’s in Dallas or Mexico City. You’ll get the same answer.

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newbie101

November 10, 2007

Bird, Lamar, thanks for responding to my comments. I admit I am way out of my league in this discussion. It is difficult to find anywhere for the layman to become part of discussions such as this and make comments and receive imput in order to become more educated and understanding of such important matters.

As far as I can recollect, LA has been divided into N. LA, S. LA and NOLA…all seeing a widely different version of the needs, the visions and the focus on their ‘part of LA’ rather than the collective vision of the State as a whole. To my experience, more so than any other state I have lived or visited. Somewhat like brothers, eager to be seen separately even throwing one another into the negative spotlight to make themselves look ‘special’, stand out or trying to get that piece of the pie.

The differences seem more pronounced since the storms & levee failure in NOLA, especially with the aid of ‘outside’ critics. As an avid reader of not only local but national news and opinion and equally a viewer of many news programs, including international channels, it is apparent in many circumstances that many of us in LA are not aware of just how critical the outside world’s view of us in general. Just as Bird pointed out, talk to many from in or outside the country and they have a cautious, if not caustic opinion of LA, her politicians, her reputation and her citizens. Sadly, this fact has been encouraged by some comments not only by outside critics but by some of La’s own citizens, especially those in the political arena, even indirectly or unintentionally.

A basic case in point, I know of a person who was interested in the purchase of a horse from another state seen on the internet. When she said she was from La., the deal was abruptly called off with a crude comment about LA people. That is one case, I have heard others and from a simple viewpoint, if someone doesn’t want to sell a horse to La because of the reputation…how many businesses are hesitant? All one has to do is search the comments in many of the blogs and opinions about La & about those who live here, many are very negative and usually crude. Even though they are exhaggerations, lies or baseless accusations, many have taken them as the ‘gospel’ and painted everyone in La with the same paint brush.

I agree w/Bird that in certain areas in particularly, BR and surrounding areas have made economic advances at a rapid pace since Katrina. Good from an economic view but necessitates increasing need for critical infrastructure improvements to accommodate such growth or else won’t this dampen the successes without a coordination from all involved? Personally I would rather see a steady well-thought out growth and stablized town rather than a splurge of an instant ‘gold rush’ town that booms then fizzles.

In reference to the comment regarding the concentration on the impacted areas, I believe it is important now, more so than ever to work together to ‘fix’ the impacted areas. Imho selling La without ‘worrying about’ the impacted areas and its citizens is like trying to ‘sell’ the old homestead without bothering to clean it up or make necessary repairs from being a rental property for years and wanting to rent a house from your realtor with him unaware that you were not the one that left the homestead in such disarray & disrepair. He might mistakingly believe you might not be of the character he wants to rent to after seeing the homestead.

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newbie101

November 10, 2007

On a final note, for the sake of argument why couldn’t a ‘think tank’ group be formed by LED or the Administration or by a private party with politicians from both parties, businessmen & women, educators, health professionals, law enforcement, clergy, developers and/or other great thinkers from all regions of La to each actually visit all of the devastated areas (rather than some experts who supposedly have not visited the areas) and talk to the locals of those regions and work together to come up with ideas, visions and goals for the betterment of ALL of Louisiana and invite imput and provide updates to inform all the citizens through positive media for the sake of the recovery of La to begin the rebuilding of La’s reputation by focusing on the positive aspects? Not so much to correct a particular situation but to gain an overall picture of the situation and improvements and promote a more encouraging picture.

To date, it has seemed that the whole situation has been as if someone was trying to herd cats and trying to build a house with no blueprint at the same time, with a whole lot of spectators. Personally, I do not lay blame at any one person’s feet. The situation from an observer’s view seems nearly impossible, the massive areas impacted, numbers of individuals involved, every aspect of a society involved, rules, red tape, the variety of players, gov’t agencies, organizations & situations involved, alot of people on separate pages, many of the citizens outside the area unaware of the magnitude of the situation and basically no historical equivalent to gauge or implement ‘lessons learned’ from. It just seems to me that if a few people began rowing together in unison in one direction rather than 2 people rowing and 10 arguing the proper techniques, would bring encouragement not only to those personally affected but would encourage the rest of the state to follow suit.

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Raymond Schmidt

November 14, 2007

Oh Olivier worked with Mitch to dimantle Film & Music for the criminal Mark Smith to steal everything he could. Mitch even let Smith be his Executive Council for a stint. Olivier never read any of the Tax`Credits applications and millions went to theives who were connected to elected officials. Mitch & Mike what a great team!

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Bird

November 14, 2007

You left out the part where Olivier had Smith as his legislative liasion for a while – maybe that’s how Rep. Beard figured out how to use the credits to his advantage.

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