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Tom Keane

Economic sunshine in the Bay State

By Tom Keane
September 6, 2011

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THERE SEEMS to be a disconnect between what our eyes tell us and the drumbeat of economic misery we hear every day.

Three years ago, Boston’s fashionable Newbury Street was dotted with boarded-up storefronts while shoppers were sparse. Now the place is bustling. The same is true of the city’s other commercial hotspots, such as the waterfront, the North End, and the South End. Restaurants and stores are packed on weekends, to be sure, but increasingly during the week as well. New areas, such as the South Boston Waterfront, now draw crowds and developers. Granted, Downtown Crossing is still a disaster, but its problems are less a function of today’s economy than they are hangovers of the 2008 crash that left us the big empty hole that was once Filene’s.

It isn’t only the city that seems alive. Local shopping malls are packed with cars. The major routes to vacation spots on the Cape and in New Hampshire, Maine, and the Berkshires have been packed this summer as well. Traffic jams have returned, an aggravation that is also an indicator that people are back on the roads, commuting to jobs.

Anecdotes can be misleading, but data back them up. Massachusetts’ unemployment rate in July was 7.6 percent, well below the national average of 9.1 percent. Granted, it’s still too high, and hidden in those numbers are those who have simply given up looking for work and others who have taken jobs paying below what they once made.

Still, it’s better here than elsewhere. For what the national averages themselves hide are the states that are truly economic disasters. Michigan, for instance, has 10.9 percent unemployed - and the number is rising. Nevada is at 12.9 percent (a fact casino opponents might well emphasize). So is California - the Golden State we all once envied.

How did we get it so good? At its core, we have the kind of new-era economy that everyone else says they want, one based on invention and creativity. Financial services, technology, and health care all thrive in Massachusetts. But why are we the way we are? In a state that still mocks itself as “Taxachusetts’’ and (often-deservedly) suffers a reputation as being anti-business, how are we managing to succeed?

Consider three factors. First, we are a tolerant state, accepting of alternative lifestyles, of gays and lesbians, and of immigrants. That may offend some, but it is hugely attractive to others, especially those that urban theorist Richard Florida calls the “creative classes.’’ It’s that group that Florida and many others argue drives cutting-edge economic development.

Second, we are actually making our schools better. Back in 1993, the state legislature pushed through education reform, a series of measures that gave us everything from charter schools to MCAS. Despite resistance through the years, we have stuck with those reforms, and we have reaped the benefits. Our kids now consistently rank better than those from other states; an analysis this year from the American Institute of Physics, for instance, rated Massachusetts first by a large margin in preparing children for careers in science and engineering. Smart workers make for strong economies.

Third, we have a remarkably cohesive political culture. It is striking to see the vicious politics of other states and Washington, D.C., and compare them to the almost genteel way we here in Massachusetts air our disagreements. One can see that in the reaction to US Senator Scott Brown. Yes, of course Democrats want to defeat him next time around. But meanwhile we see Boston’s strongly Democratic mayor last week praising Brown for his work ethic and focus on constituents. It’s hard to imagine that kind of acknowledgement in the poisonous politics of other states, and it speaks well to how the Bay State uses politics as a way to solve problems rather than just to slay the foe.

All this is to our good. Still, Massachusetts is not an island. If a sick economy is like a disease, it may be that we have just resisted longer than others and will eventually succumb to the nation’s maladies. The alternative is unlikely, but still worth considering - that the things Massachusetts does right could spread elsewhere, a kind of positive contagion that could help bring about a cure.

Tom Keane writes regularly for the Globe.