dimanche 3 mai 2015

What would actually have helped Baltimore

I have seen so many mindless political posts in this section. Reading them is like listening to gravel rattling in a can. It amazes me that someone can assert with a straight face that Baltimore's problems could be solved with more parent responsibility or more religion.

I've seen some very nice discussions about economics and I've seen some that were hair-raisingly inane. I saw town fool, Allen West, on Justice (sic) With Judge Jeanine, last night claiming that tax breaks would fix Baltimore. This is what I would expect from Fox but it's still sad.

You can't fix areas like this with tax breaks. If you make the tax breaks attractive enough then you encourage investment; that's true. However, this simply leads to gentrification and the poor are displaced somewhere else. So the problem is never fixed; it's only relocated. You really don't have to be all that bright to understand this.

So, why do we get idiotic suggestions like this? Well, you have to start with a deep-rooted prejudice against poor people. You see them as many saw native Americans and native Africans as backward, unambitious, and immoral. You then imagine that someone of good character, a probably white business man with Christian faith could step in and, with a wave of his magic check book, turn everything around. Yes, it's ludicrous but when you have deep-seated prejudices, this is more believable than the alternative. And, it's clearly wrong.

The problem we have is a valid application (for a change) of the idea of irreducible complexity. Social behavior, morality, education, and economics are intertwined. It's almost impossible to fix one in isolation however it is equally almost impossible to fix them all at the same time. It's no wonder then that they seldom do get fixed.

The surest way of staying unemployed is to wait for someone else to offer you a job. The best way of getting employed is to make your own job. There was a time when jobs were low entry. For example, shining shoes only required a shoeshine kit. A better example in New York around 1900 was probably pushcart vendors. People came to the US with almost nothing, and street level space is expensive in any city. However, for the cost of a cart and whatever you could sell you had a business. These could be bootstrapped into larger businesses over time.

Today, there are no pushcart vendors and the cost of something like a food truck is way out of reach. This is the essential problem: there are no longer any entry level opportunities to start businesses. There actually is a solution and one that has been known for some time (since the 1950s). It's called a small business incubator. It basically provides a supportive and protected environment for people to start new businesses. I checked and such a thing does not exist in the State of Maryland.

Some who are reading this might do a Google search and find things in Maryland that claim to be business incubators; they are not. These are actually business development centers. What's the difference? A business development center is where you go to start a business when you already have most of what you need. You'll need about $140,000 and won't make a profit for two years. This is typical for business startups but is simply not possible in an economically depressed area. This level of entry is a barrier to new businesses.

A small business incubator is more basic than this. Think of it more along the lines of adult literacy classes. People would go to a business incubator to find out what was possible and learn things about taxes, regulations, and permits. They could improve skills and learn processes. They could develop ideas into businesses without having to make restrictive investments of time and money. For example, it might be something that someone would do on the weekend. And when you get to the point where your ideas and skills can become a small business you can get micro-loans of $1,000-$5,000. These might also provide spaces for people to work for free and then later more space for a low rent. Again, the idea is to grow out of these incubator businesses into larger, self-sustaining businesses.

It does cost money to run an incubator. However, not only do these create businesses that employ people they also provide social stability. This has been studied and it has been shown that people feel safe when they see someone they recognize everyday. Larger businesses are more impersonal which is why it only tends to happen with small businesses. This effect has been shown even with hotdog vendors who were on the same corner everyday.

If you were to peruse Forbes magazines, you'd find references to Business Incubators. This is not quite the same thing. These are business ideas that need some backing to become national or international businesses. We're talking about something entirely different and on a small scale, anything that provides a service and a paycheck.

Could anything like this actually work? Yes, I know it can because it has already been done. There is a project in New York called, Rocking the Boat. It's located at Hunts Point which is as bad as any area in Baltimore:

Hunts Point has the highest child poverty rate in the country. One-third of families in the neighborhood get by on less than $15,000 per year. Statistically, it’s as dangerous as it is poor, yielding the third-highest crime rate among the city’s 69 neighborhoods.

It started as a volunteer project at an East Harlem junior high back in 1996 in an area with a 35% high school graduation rate. It has now become an independent organization with its own facilities. They've involved 3,000 kids and built 50 boats. This is not the only one that teaches boat building in New York. The Village Community Boathouse at Pier 40 and the Brooklyn Boatworks also teach boatbuilding to children. However, Rocking The Boat is probably the best model for a poor neighborhood and a small business incubator like this should be able to have a much larger effect the community. This is something that would actually work.


via International Skeptics Forum http://ift.tt/1KEN20O

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