While it may seem like a parody on the education slogan ‘No Student Left Behind,’ the message is
no less serious as that of a heart attack. In reviewing the options available to president elect- Obama
in addressing the economic needs of the nation, the problem could not be more complex or more
diverse, specifically on how to address the broader economic issues let alone from state to state.  

                                             

While his Transition Team has embarked on positioning the president-elect in a proactive and positive
light, his first salvo at trying to address the economy has already been changed from what was first
benchmarked as a $600 billion stimulus package and the creation of 2.5 million jobs in his first two
years in office, to one  that has been changed to what now appears to be $700 billion and 3 million
jobs.  Unfortunately today’s Labor Department numbers illustrate another 500,000 plus workers applied
for unemployment benefits.  This year alone, 2 million Americans have filed for unemployment.  It is
forecasted that this number could double by the end of 2009.

Obama’s choices are narrowing.  If he gets congressional approval for the stimulus package, the
question(s) is/are: 

• If we print more money, it will simply create untold inflation
• If we bond for it, who will buy the bonds, if anyone?
• Is it time for a good old ‘Buy a US Savings Bonds Campaign’
   reminiscent of World War II - Buy American?

While it may seem that the US economy has flat lined, there is no reason to rush to judgment
regarding a solution.  Foresight should be embraced before reacting. Such is the case with the
proposed stimulus package still being formulated by the president-elect. 

The rationale behind this statement is that states in particular have embraced different types of
industries based upon their comparative advantages, e.g., natural resources, location along
navigable rivers, industry clusters, etc..  Some are still chasing smokestacks and still others 
support buggy whip manufacturing and some have no idea what a new economy is  let alone
how to embrace and support it. Hence the reason why the importance of a good well balanced
stimulus package is  to a state or local economy - one that supports economic development efforts,
infrastructure and workforce training specifically one that trains for the new economy such as 'green
collar jobs.'  Otherwise the addage 'throwing more money at something' will be all that will occur.

PRACTITIONERS PERSPECTIVE
Wayne Schell, CEO & President of the California Association for Local Economic Development,
CALED was approached by Obama’s Transition Team to coordinate a meeting of national based
economic development organizations to facilitate the use of a stimulus package to create investment,
jobs, income and wealth.  The following is and outline of the action.


                                                  

Wayne Schell, President and CEO of the California Association of Local Economic Development (CALED),
received a request from an Obama transition team leader to gather a group of stakeholders to present
policy and tactical recommendations on infrastructure and job creation to the Obama team in Washington,
D.C. "It's not often you get a request like that. I was impressed that the Obama team reached down to the
real practitioners who know economic development at the local level and can offer sound advice to stimulate
jobs and much needed capital for local communities," said Schell.

Schell was tapped by Rosie Rios, who is responsible for public affairs, policy and planning for the Obama
Treasury/Federal Reserve Transition Team and serves as a CALED Board member. Rios, who worked as
a volunteer on the Obama campaign, currently is on leave from her job as managing director of investments
with MacFarlane Partners in San Francisco, a real estate investment management firm. After receiving the
request, Schell quickly went to work and placed at the top of his list Jeff Finkle, CEcD, President and CEO
of the International Economic Development Council (IEDC). Together, they convened a group of ten
professionals who shared their views on the implementation of the economic stimulus package. In addition
to CALED and IEDC, organizations represented at the meeting were Community Reinvestment Fund, Council
on Competitiveness, National Association of Development Organizations, National Association of Development
Companies, International Downtown Association, Association of Defense Communities and Council of
Development Finance Agencies.

According to Schell, "The Obama team was interested in the 'how'...how to get money on the street fast and
determine the criteria for the best and most reliable sources of funding. Like CALED, the Obama team is
interested in short-term projects that put people to work and help long-term economic development.

The meeting between the group Schell and Finkle assembled and the Obama transition team took place on
December 16 in the nation's capital. Among others, Schell proposed the following federal stimulus
recommendations:

• Focus stimulus dollars on economic development and ask the question, 
   "Will the project stimulate business development in the short term 
    as well as the long term?"
• Establish a special state/local economic capacity fund to help cover 
   the cost of existing economic development organizations to identify, 
   sort and package business development infrastructure and lending projects.
• Stimulate the private market using federal funds in a way that will 
   leverage credit enhancement and loan guarantees through existing federal 
   organizations (i.e., Small Business Administration, Housing and Urban 
   Development and EDA).
• Stimulate workforce development and fund community colleges to provide 
   "Demand" training.
• Use the federal Economic Development Administration (EDA) as a major 
   vehicle to deliver local economic development projects.

"Frontline practitioners are not often invited to the table until after decisions are made on what will be done,"
said Schell. "It's one thing to talk about the need for funds to fix something and another to find out how that
money will be used and work out the process on how it's going to happen up front before the plan is finalized.
We appreciate that the Obama transition team is reaching out to people who are 'doing the do.'

In the meantime, the California Business Minute provided input to Wayne on the issue raised above on the
concept of ’No Economy Left Behind.’  Wayne quickly added the idea to the CALED briefing paper.  We
hope that the Obama Transition Team is watching!

Briefing papers presented by Schell and other members of his group will be posted on CALED's Web site.
Schell praises Obama and his team for being open and moving information into the public's view. www.CALED.org

 
Tim Johnson
tjohnson@CaliforniaBusinessMinute.com
www.CaliforniaBusinessMinute.com