COLUMN: Bad ‘economojo’ plagues Range, and beyond

This is my weekly column for the Sunday, July 17, 2011 edition of the Hibbing Daily Tribune.

Bad ‘economojo’ plagues Range, and beyond
By Aaron J. Brown

These are unsettling economic times for American small towns, particularly the mining towns and surrounding region here on northern Minnesota’s Iron Range.

It’s not that the Range economy is awful. Things are better than 2008-09. Area taconite mines are running hot, pushed by global steel demand. The problem is that the future seems hazier than ever, and I wonder if that’s not the real problem elsewhere, too.

Here on the Range, most big new economic development prospects — a steel mill, copper/nonferrous mines, and a power plant — linger in some sort of external delay or existential improbability. The steel mill needs international financing. The copper mines need permits and international financing. The power plant is farcical, beyond a long shot. Nevertheless, these projects absorbed the most public economic development investment on the Range over the last 15 years, to the tune of about $100 million (ballpark) combined local, state and federal dollars.

Of course there have been other initiatives. One economic developer catchphrase clearly states “We need to hit singles, not just swing for the fences.”

In this, agencies like the IRRRB and city economic development authorities have tried different ideas under different leadership philosophies and budget climates: wage subsidies, small business loans, storefront loans, education programs and the like. Many more millions of dollars have been spent in this way, with measurable success and failure more or less holding equal.

Here, as seen across the country, economic development remains an advanced sort of Hungry, Hungry Hippos game – lots of churning for a few marbles. You can hear about this in an excellent recent episode of NPR’s This American Life (www.thisamericanlife.org).

Some have argued that an immediate embrace of nonferrous mining as a short-term economic solution would allow growth to replenish local coffers and foster economic diversification. In other words, “Get those mines going now and then we’re talking.” A similar sentiment exists for Essar’s mining and steel proposal in Nashwauk, the largest consumer of public job creation dollars of our current crop.

I can respect the concept but, first off, I couldn’t get those mines going if I wanted to and neither can all the elected officials who ran vowing to start those mines. The involved companies are very optimistic but can’t make any promises about long term mineral prices or demand.

It’s interesting that the stock for Polymet, one of the biggest players in Range nonferrous mining, soared the day after they closed their $4 million loan and land swap with the IRRRB last week. Though the company claimed not to “need” the loan, it’s clear that they needed the boost to gain the attention of Wall Street financiers. Even then, analysts at stock watchers like Motley Fool advise some caution until mining begins; paradoxically mining won’t begin without permits and financing.

Regardless, these operations will not alter the current mineral-dependent, tourism-focused white dwarf fate of this region, even if they are successful. Citizens will be rightfully pleased if jobs are created, but public policy makers must not overlook their responsibility to plan beyond these big projects controlled by outside forces.

The mines will mine if they can make a profit, as they always have. No, we must diversify first. We must diversify now. Any public spending must have direct public benefit, now more than ever.

Where to start? How about a public/private partnership to connect high speed internet across the region — even beyond our cities to the rural areas where many professionals now live? Successful models have now been demonstrated in Wyoming and Massachusetts. (Read great coverage of this issue at DailyYonder.com). Only ignorance by elected leaders and the heavy thumbs of lobbyists have stopped efforts in the past, and continue to hold the issue off the docket.

Few people will start creative or entrepreneurial projects where they can’t get new digital products to market. This is what we need.

We can plainly see that public dollars are limited these days. Still, economic development and job creation strategies must build for the future. A vibrant, balanced economy for the Range must include the capacity to attract workers, entrepreneurs and creative people outside resource extraction industries. In short, we are better off investing in schools, effective local government, and necessary technology. These things will flex with the times and provide the most to our people.

We can do nothing and enjoy the limited prosperity of high taconite prices for one to four years. We might break lucky if all the mining projects boom and stay open beyond the decade, but that’s a gambler’s prayer. The economic confidence necessary to complete a full recovery will require some thought, some planning and some hard work outside our comfort zone.

The problem isn’t our economy. It’s our trajectory or, if you’ll permit me, our “economojo.” We need more, and we must provide it ourselves.

Aaron J. Brown is the author of the blog MinnesotaBrown.com and the book “Overburden: Modern Life on the Iron Range.” He teaches communication at Hibbing Community College.