Monday, June 18, 2012

Ironic International Economic Development

Image matters. Perception shapes reality. Pittsburgh's boom shouldn't surprise anyone. Buoyed by a shrinking population, the urban landscapes of the movie "Deer Hunter" are still fresh in our minds. One can find plenty of real Rust Belt examples to justify contemporary condemnation. The Mon Valley remains on the periphery of globalization. Thus, Pittsburgh is no Seattle.

Mexico is no Brazil. Brazil is part of BRIC. Mexico is a drug lord war zone with millions of workers streaming over the border to the United States. The story:

“Brazil has had two powerful narratives,” said Gray Newman, an economist for Latin America at Morgan Stanley. “If you believe in China, you believe in Brazil. That counted for a lot. The second narrative is that ‘We’ve become a normal country and created the conditions for the emergence of a middle class.’ Those narratives are so powerful.”

Mexico’s story has not been as positive, Mr. Newman said, with its fortunes tied to the United States and the government engaged in a war against powerful drug gangs. Even with the tide turning in their favor, Mexicans are so gloomy they do not see it, analysts say.

Emphasis added. Even with the tide turning in their favor, Pittsburghers are so gloomy they do not see it. As Mexico vs. Brazil demonstrates, narratives matter. And for all the love that the US Chamber of Commerce showers on Pittsburgh and Denver, we're still left with this junk:

Despite the growth of jobs here, annual population figures are either flat or growing slowly, the report warns.

"Pittsburgh's new challenge is not in stemming an outflow of residents, but in improving its performance in attracting new ones," it said.

The cause for celebration is job growth. Is this not the best way to improve performance in attracting new residents? I gather that the Praxis Strategy Group wrote the report. I've been unable to find a copy online. The warning is meaningless, a rehash of the old narrative. It's vapid.

Without robust population gains, Pittsburgh is Mexico. Mexico can surpass Brazil in every economic metric. As long as murders associated with the drug trade continue to dominate the headlines, Mexicans are still invading America. No one will believe the job growth happening right in front of them.

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