Main Street Journal

On the Money: What it Takes to Make Your Community a Safe Place for Investment?


Dollar Bill
The following is an excerpt from our December issue. Subscribe now.

by: Chuck Bates

Living in the same community we all have one issue in common that determines our future success or demise as a locality. We all want our community to survive economically. Whether someone is living in the most toney neighborhood or just in “the hood” we all have to make a living and in order to do that we have to attract capital to our community in the forms of new families and new businesses. Let’s face it everybody must feed, house and clothe themselves’ and that requires capital. But what does it take to retain that capital?

Capital looks for two things: 1.) Economic Stability and 2.) Political Stability. One need only look to other regions of the world to see the risk aversion of capital. Why are there no serious skyscraper lined cities in say Republic of Congo? Simply the risk to capital due to both economic and political instability overwhelms the potential reward for investing in the area. It is not due to a lack of natural resources as the nation is mineral rich. The problem lies specifically in the political upheavals and constant warring between factions thus destroying any hope of economic stability. But we don’t have to look to developing areas just look at Lebanon. Lebanon was at one point considered “The Riviera of the Middle East”. It was a business and banking center and today it is in constant turmoil due to political instability to the point new investment in such a place would be almost certain loss to the investor. Yugoslavia is another example of a nation that was on its way to modernization both politically and economically. The Winter Olympics were even held in the country but today it is a shell of a nation nowhere near where it was just two decades ago, all due to political instability and the subsequent flight of capital.

I mention all of this to bring us to our own community. Memphis and the surrounding area was once a very much booming community. Some would argue it has continued to boom based on all of the growth in the suburbs but in my estimation that is actually a sign of trouble more so than growth. Surely we have seen actual growth and some multinational corporations call Memphis home but how many have left the city and how many more are refusing to locate here due to both political and economic instability? I cannot tell you how many folks I have spoken with who are for lack of a better term “getting out of Dodge.” The flight to the suburbs was not necessarily all growth as much as it was transplanting capital out of the city proper over the last 16-20 years. Why the flight of capital, well again it gets back to economic and political stability. When you have political leadership that is willing to waste hundreds of millions of dollars and then call on the taxpayers to cough up more and more every time City Hall finds itself short on cash then that brings some hard choices to the individual. In many cases it forces them to leave so that they can afford to live and take care of their families. When the political leadership oversees the biggest expansion in taxes in the locales history, the biggest expansion of debt, the worst record in history in the number of failing schools and then to top it off the dubious distinction of staying on the top ten list of most dangerous and crime ridden areas per capita in the nation, then capital is bound to flee.

I’m sorry Mr. Mayor and the rest of the race baiters chalking the flight up to racism, that dog just won’t hunt anymore, namely because there are thousands upon thousands of African-American families fleeing as well.

Now we find ourselves faced with the very leaders who have been the overseers of the aforementioned failures seeking to expand that power via consolidation of city and county government. While there may indeed be some areas of the two distinct governments that are redundant the manner by which the local politicos seek to merge the areas is a nightmare ready to take place. Even a couple of republican commissioners are pushing the consolidation of governments starting with the Sheriff’s department. They are actually suggesting we take a failing city department that serves only at the pleasure of a dismal mayor and have it takeover a fairly efficiently run Sheriffs Department that is accountable to the people? I dare say that if such political instability continues in our community then we can guarantee the continued flight of both economic and human capital from our region.

Needless to say there is much more to this issue of consolidation and we will continue to examine it in our next issue.

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