Cargo Cult Economics And Baton Rouge’s Effort To Be The “Next Great American City”

This week’s edition of the Baton Rouge Business Report carries a column by J.R. Ball demanding “Let’s treat Baton Rouge like we do LSU football.” Ball’s thesis is that people in Louisiana’s capitol city have established murderously high standards for the flagship university’s football coaches to uphold in leading their team, but won’t apply those standards to the city’s governance as a whole, and this needs to be fixed.

What does he mean by this in practice?

Inexplicably, we choose to ignore the remarkable potential of Baton Rouge.

This is the home of the state’s flagship university, an institution capable of so much more than winning football games if we’re willing to 1) demand a visionary strategic plan, 2) commit resources to its execution and 3) hold LSU’s academic leadership as accountable as we do its football coach.

Baton Rouge also boasts some outstanding regional medical facilities with amazing research potential. Indeed, there are those working to create a medical corridor, yet this is something everyone in East Baton Rouge Parish—and throughout the Capital Region—should both be demanding and investing in to make happen. Yes, the Pennington Biomedical Research Center needs more resources, but we must make that support contingent on Pennington officials embracing necessary changes in their research philosophies.

This is a city blessed with some of the friendliest people on the planet—an asset worth celebrating. Still, we can’t ignore another reality: a community divided by race and economics. At some point the finger-pointing and waiting for the “other side” to make the first move must give way to taking those first difficult—and painful—steps together.

Baton Rouge, like almost every other city in America, preaches the need to attract and retain young, educated professionals. Here, it’s been a nonstop topic of conversation since 2002 when BRAC and then-Mayor Bobby Simpson led the first canvas trip to Austin. It’s been 15 years since the mayor of Austin told us the future of that city rests with ideas bouncing around the minds of 20-somethings, yet Baton Rouge continues to nibble around the edges when it comes to making the quality of life changes these “keys to the future” demand in a city they call home.

And a bit more…

Being a world-class city—or even America’s next great city—requires more than relaxing open container laws downtown, building a tram or, as we were once told, landing a Costco.

We’re OK with football building one Taj Mahal facility after another in the facilities race that is today’s college football. Clearly, we’re good with shelling out serious cash on season tickets, various “excellence” and “tradition” fees and four- and five-figure donations to TAF because many of us accept that’s the price of supporting a nationally competitive program.

Contrast that against our unwillingness to spend a few hundred property tax dollars annually to address the horror show known as this area’s traffic gridlock.

One place where the state, city and private sector have made a football-like investment is on the revitalization of downtown. The transformation, frankly, has been astounding. It’s not perfect and there’s more to be done, but downtown’s rebirth is a shining example of what can happen when enough people expect and demand change.

So essentially what he’s saying is that it’s the refusal to commit resources to building nice things which is standing in the way of Baton Rouge’s destiny as the Next Great City, and that refusal is the reason Baton Rouge is unquestionably in decline.

Before we unpack all this, we need to introduce a concept which is important to describe what’s going on here. That would be “cargo-cult economics;” which the smart set in this city is eaten up with.

What’s cargo-cult economics? Well, the concept began with a quote from a Nobel prize winning physicist, Richard Feynman, who identified what he calls a cargo cult…

In the South Seas there is a cargo cult of people. During the war they saw airplanes land with lots of good materials, and they want the same thing to happen now. So they’ve arranged to imitate things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas–he’s the controller–and they wait for the airplanes to land. They’re doing everything right. The form is perfect. It looks exactly the way it looked before. But it doesn’t work. No airplanes land. So I call these things cargo cult science, because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential, because the planes don’t land.

Feynman’s cargo cult science concept applies to economics, and Baton Rouge is a great example of it.

Essentially, what Ball is complaining about is that Baton Rouge lacks the wealth to be the Next Great City, because at the end of the day wealth is what he’s talking about. LSU’s football team is highly successful, and it’s expected to be even more successful than it is, because the athletic department is one of the wealthiest in all of college athletics and LSU has as many or more paying customers and well-heeled boosters as anyone. That leads to state-of-the-art facilities, a great atmosphere, prestige and notoriety, and all the other trappings of that wealth. Individuals like Nick Saban, Jamarcus Russell, Kevin Faulk, Tyrann Mathieu, Odell Beckham, Jr. and Leonard Fournette chose to participate in building that tradition because of the wealth, and its trappings, which LSU Football boasts of.

But Baton Rouge as a city doesn’t have the wealth of an Austin, or Portland, or Charlotte, or the other cities that the smart set in town have taken junkets to over the past decade and come back with a furious determination to emulate, so that this can be the Next Great City.

And they’re a cargo cult – of which Ball sounds like a member, given his complaints.

Fundamentally the problem is a misunderstanding of where wealth comes from, which is something Louisiana as a whole is grossly deficient in grasping. They mistake wealth for its trappings, and they believe if they just tax the citizenry enough they’ll be able to afford nice things like they have in Austin or Charlotte or Portland. That’s why we’re saddled with $18 million per year to pay for a bus system that was advertised as state of the art but is instead a fountain of graft. It’s why we have a library system sitting on tens of millions of dollars in surpluses and construction plans to build Taj Mahals the LSU athletic department would find extravagant, while the public school kids in town would be just as likely to chew the covers off the books in those libraries, or rip out the pages and use them for rolling paper to make joints, as to read them. It’s why some 16 cents of every dollar in property taxes in Baton Rouge go to BREC, the city’s parks and recreation department, as it closes golf courses under its management – which of course it’s doing; the citizens don’t have enough money to play golf anymore.

And as Ball notes, traffic is killing the city.

Why is traffic killing Baton Rouge? Well, the roads aren’t plentiful or wide enough and they’re poorly designed. But the number one reason for the traffic problems in town is that all the middle class people have moved out of the parish, or at least they’ve moved out of the city, because crime is out of control and the schools are terrible. That means they’ve got to commute into town from Ascension or Livingston Parishes, or from Zachary or Central, and in doing so they clog up the few highways Baton Rouge has twice a day. That problem filters onto the surface streets and as a result every day is Road Rage Day.

Thus you’ve driven the wealth out of the city, and you’ve also driven away the people who would give you the energy and the vibe to create the Next Great City here. The rich and the poor don’t do that; it’s the middle class who’ll supply the night life and the festival traffic and the shopping and all the other things which would make folks in Baton Rouge think this was a city on the move.

You couldn’t do South By Southwest in Baton Rouge, because the people who have to fight their way home to Prairieville or Denham Springs in the afternoons aren’t going to fight their way back into town at night. You need vibrant neighborhoods close in so you could build something like South By Southwest into a festival people would come in from out of town for. And when “close in” to downtown Baton Rouge contains a place called The Bottoms, which is an inland sea of drugs, poverty and murder sitting right between downtown and LSU’s campus, and other similar neighborhoods given a nickname like The Deadly Crescent, that’s not a recipe for civic success.

It’s a recipe for middle-class flight.

And the nonstop attempt to raise “good” taxes – which is what we were told Mayor-President Sharon Weston Broome’s “BTR plan” was, since it would fund road projects – without lowering the bad ones making up the insane amounts of money Baton Rouge spends on libraries, zoos, dog parks and a bus system nobody uses – is pure cargo cult economics. They’re driving away the people whose daily work creates wealth, and dissuading others who might choose to become entrepreneurs, inventors, innovators and other engines of prosperity, and then they’re attempting to use government to create a facsimile of that wealth. The same way the South Seas cargo cultists built dirt runways and bamboo-hut control towers in an attempt to get planes full of swag to land on their islands.

The local government in Portland is every bit as dysfunctional and idiotic as the one here is. Portland became a wealthy city because it’s where high-tech companies like Tectronix and Electro Science Industries sprang up in the 1940’s making technical equipment like oscilloscopes and precision measurement instruments, and as the computer industry started coming to the fore those companies and others got into the hardware business. Before long that sector, and the companies springing up in it, became known as Silicon Forest and you had large numbers of well-paid people living and working in and around Portland.

In other words, it was the private sector that created the wealth the public sector in Portland applies to having a nice bus system.

Austin is precisely the same story. Why is Austin a big deal? Because Michael Dell started building computers in his garage in Austin while he was in college, and he did such a good job of it people from all over wanted to buy them from him, and pretty soon he was big enough to build a factory, and other companies popped up close to him so they could supply him with parts, and before long you had the semiconductor industry centered in Austin. The local government played zero part in creating the wealth in Austin; at best you can say they got out of the way.

The upshot of this is if Baton Rouge wants to be Austin or Portland, then Baton Rouge needs to find a Michael Dell and get out of his way. Instead, Baton Rouge had Todd Graves, the founder of Raising Canes, and got in his way – the bad public schools made it impossible for Graves to attract people to help run his burgeoning national chicken-finger empire, so as his business grew he had to open a headquarters facility in Dallas. He’s still here, but as his company grows the growth – and much of the wealth that comes with it – will happen in Texas.

Ball wouldn’t argue that point; I’ll give him that. He’s complained about the bad public schools. But is the Baton Rouge Business Report demanding a full-on voucher or ESA program for the public schools in East Baton Rouge? That’s the only way to create something innovative and interesting here. Is anyone demanding a clawback of the CATS or library or BREC money to be reinvested in infrastructure? Or that those taxes be cut so people get to keep more of what they earn, and maybe make the city more attractive than the suburbs?

We haven’t really seen that from the Business Report. Hell, its publisher Rolfe McCollister endorsed Broome last year. You really, really don’t get to talk about matching the standards for governance in Baton Rouge with those for LSU football when you’ve backed the Curley Hallman of mayors.

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