Post Diablo suggestions lacking

September 24, 2016

OPINION by GORDON MULLIN

After reading the extensive opinion piece by the Tribune’s editorial board, “Seeking economic help post-Diablo Canyon,” I was struck not so much with the suggestions proffered but by the absence of any proposals that will, in fact, work.

The Trib’s litany of suggestions to alleviate the economic impact of the closure of Diablo Canyon boils down to this- ‘somebody give us money.’ Oddly, heading the list of possible donors is none other than PG&E, the very entity that just got pushed out of the business of supplying carbon free, nuclear energy to Californians.

And, no surprise here, the other source the Trib wants to squeeze is taxpayers.

First the Trib recommends, “Don’t get hung up on conducting surveys, running focus groups and preparing elaborate economic development plans. Don’t waste time or money on fancy reports that will sit on the shelf.”

True, stacks of reports will not, in themselves, generate additional jobs- except for report writers- but from time to time we can find useful suggestions if they actually get read. Our very own Economic Vitality Corporation has several studies sitting on the shelf, presumably unread, that address this very issue.

Next up is “lobby for development funds that can be used to offer incentives,” read, taxpayer dollars used to bribe businesses to set up shop here. This is based on the belief that government can spend your money more wisely than you can; a misguided fallacy that refuses to die despite ample evidence to the contrary.

Then comes the suggestion to explore “the possibility of using Diablo Canyon desalination plant to supply water.” We all know PG&E was OK with the idea at one point but that was before they got run out of town. I suspect there’s a correlation here.

The Trib does acknowledge that PG&E “has offered $49.5 million to local government agencies to make up for tax revenues losses” and “$350 million to employee retention, retraining and severance” and a “verbal commitment to continue its current level of contributions to nonprofits, through 2025” but obviously, that ain’t enough. We want more, or at least the Trib does.

Then comes the fuzzy stuff: “Network with other ‘nuclear communities’ that have lost” their plants, “especially on legislation” that, in short, would seek taxpayers’ dollars. The Trib evidently feels that the communities that encourage the closing of nuclear plants should be compensated for diminished tax flows that follow on their decisions. We obviously don’t like the outcomes of these actions and wish to avoid the consequences. Several of my grandchildren feel this way.

The Trib further bemoans the fact that “the federal government has no assistance program for communities that lose a power plant.” Good. Why taxpayers should give money to government agencies that experience a diminished tax base due to actions of other government agencies eludes me.

There are other suggestions but we can put them all in the ‘taxpayers should give more money to government agencies which then gives it away’ file. We know that government has a poor track record in this department and I fail to understand why this taxpayer giveaway should be the default solution to ‘fix’ economic downturns.

And then, just in case you thought there was insufficient hallucinogens in the Trib’s office brownies, they follow on with the ultimate strategy, right out of the 1955 Soviet planner’s handbook: “We urge…. that economic development funds can only be used to develop high-paying positions” and not (sniff) those “entry-level jobs in retail and service industries.”

Consider, if there were actually a live economist, government planner or elected officeholder that could pull off this magic, as opposed to those who claimed to be able to do so, wouldn’t we have heard about this magician and have crowned them king or queen by now?

However, the truth is no one can. There are at any point in time only a handful of these sweet, highly sought after jobs to be had and countless other communities want them too. Now it’s normal for communities to want these high paying, non- polluting, sustainable industries, but wanting isn’t enough. The truth is, markets are far better at making these decisions, not government agencies.

Here’s what actually is within the government’s power and will work.  This list will come as no surprise to anyone who has worked as a manager/owner or has taken a econ 101 class. Businesses are attracted to areas that have low taxes, fewer development costs and minimal regulatory paperwork to wade through. They want assurances that these costs won’t change and, in our state, they need just one other inducement to move to the central coast- low, or at least reasonable housing for their employees and office costs. But we all know this is not found on the Central Coast.

Note, we have several inherent advantages over most communities in North America. You know them. Sun and salt water. We’re surrounded by a physical environment that is so attractive that thousands come here just to soak a bit of it up.  That’s why we have a tourist industry. But alas, these are, as the Trib says, merely entry level service industries; obviously something we don’t want, unless you’re the person that actually wants to have a job, any job.

But our housing costs remain out of sight and we refuse to do the very thing that will change that fact- build more housing. We won’t do it. But we bemoan the consequences of that policy and we delude ourselves that some other magic dust is available, somewhere, somehow.

Finally, here’s one other response that could be implemented by those agencies most impacted by the demise of Diablo. It’s the same response that the majority of households encounter from time to time. When incomes drop, cut costs. Imagine that? What if government agencies actually had to rethink their priorities because there’s less revenue? Households do it all the time and governments should too.

So let us acknowledge that the loss of revenue from Diablo Canyon is substantial and will affect us. But we’ll live through it and we’ll do that better, with less collective distress, if we align our expectations with reality from the start.