Looking for real recovery
Nearly two years into the state’s painful recession, the governor plans to hold an economic summit today.
That should tell you something about our state’s leadership during the worst economic period in decades. A long roster of speakers at the Federal Reserve Bank of Boston will talk up our prospects in the near and presumably improving future. I didn’t see anyone in my copy of a draft agenda likely to acknowledge the fact we’ve been deep in the muck for going on two years.
To be fair, governors get too much credit during sunny economic periods and too much blame during tough times. Recessions are big national clouds that rain on everyone, even if some regions get wetter than others. Governors, including Deval Patrick, don’t create the economy’s really big problems and they can’t solve them either.
But they can make a difference. A state’s economy can be nudged one way or another by admittedly difficult government budget decisions. The effectiveness of business development efforts by states matters in bad times, too, in some cases especially so. Visible leadership counts.
The governor’s economic men and women would tell you Massachusetts has done well on all these counts. Hard decisions were made. Patrick brought people together before to plan the state’s strategy on federal stimulus money and the governor’s life science business initiative. Now economic recovery is on the table.
“This is the right time to talk about how we accelerate our path out of this,’’ says Greg Bialecki, the state’s secretary of housing and economic development.
I’d like to think so. But it doesn’t feel like much of a recovery so far and important measures of economic revival - like employment - might not improve a lot nationally over the next year, according to the Obama administration’s own economists. Our jobless rate in Massachusetts is slightly better than the national average, but only by a little bit and still well over 9 percent.
I’m not sure what the governor will try to do to help the economy in that year ahead, an election year. But I have a few questions for him about the year or two just passed.
First, do you still think it was smart to raise the state sales tax this summer? It wasn’t your idea to increase the tax from 5 percent to 6.5 percent, but you signed off on it. There were no attractive options when state revenues came up short, but tinkering with the sales tax goes to the heart of an important element of any economic recovery.
That element is the consumer, who drove the economy before the recession and needs to start spending more to get us back on our feet. Nothing targets consumers more directly than higher sales taxes. Advocates of the increase call it incremental, but nearly 40 percent of state residents participating in a recent Suffolk University/Boston Globe poll said the higher sales tax had prompted them to cut spending.
Second, what about the cost of doing business in Massachusetts? This was a point of emphasis early in your administration, but business people don’t think you’re paying as much attention anymore. We all know it’s expensive here and those costs will help companies decide whether to rehire in Massachusetts or somewhere else when the economy improves.
The things state government can do to limit business costs are unglamorous, a lot of bureaucratic blocking and tackling. They don’t make headlines. But they do make a real difference. Shaving our cost disadvantage is more important in a weak economy than during a boom time.
Finally, there’s the leadership issue. It’s one thing to shower money on the biotech industry or seed green tech businesses. Those high-profile initiatives are sexy, as business stories go, but they don’t do a lot to solve our bread and butter economic problems. We need more visible leadership that addresses unemployment and job creation everywhere in the state, not just Cambridge.
You seem to recognize that this is a problem. The idea for today’s economic summit bubbled out in public about five minutes after Charlie Baker became a candidate for your job and started hitting you on the economy.
So what? There’s another tough year ahead but better economic leadership can make a difference. Start this morning.
Steven Syre is a Globe columnist. He can be reached at syre@globe.com. ![]()



