Mayor Daley places big bet on high tech

There was a time, not very long ago, when government collected taxes from the citizenry to pay for needed services, often referred to as “the public good.”  When money ran low, government did less.  When times were good, government took less from our pockets.

Fast forward to today.  Times are not good—unless, of course, you work for a Too Big to Fail bank and are about to receive your record-breaking bonus as thanks for bringing the nation to the brink of the abyss and (perhaps) back again.

Chicago Mayor Richard Daley will not be bringing home several million dollars in bonus money.  The city is broke.  The Chicago Transit Authority is set to raise fares to perhaps $3 a pop, whilst reducing its already less than stellar service.  But that doesn’t mean the mayor doesn’t have an ace or two up his sleeve.

In fact, while Daley has come in for stinging criticism recently for selling off Chicago parking meters to a private firm (which promptly quadrupled rates in parts of the city), that deal left him with a very large pot of money on hand.  He is now ready to reach into it and place some major bets on the table.  Let’s all hope he has a hot hand because the city’s future may depend on it.

What are the odds of success?

The first group to benefit will be laid-off white collar workers in the tech industry.  Come again?  That’s right, Daley is spending $20 million to temporarily employ about 10,500 downsized professionals in a futuristic-sounding “Tech Corps.”  Is it just me or does this sound like something out of “Robocop?”

Here is the Sun Times’ money quote from the mayor:

We want to create a pool . . . so any company looking [for] talent can come to Chicago and they can say, 'I can beat Europe for 10, 15, 20, 30, 50 years because of the talent that is not only presently here and retrained, but also with the school system.' There's more and more talent coming out in technology.

Translation: Chicago can’t afford to lose its core of high-tech workers to other cities or even other countries.  But corporations like Microsoft (coincidentally, the mayor’s remarks were made at their Chicago headquarters) can’t or won’t set up old-fashioned job banks like the ones that broke Detroit’s economic back.  So we, the new corporatist city-states of America, will do it for them.

I can’t speak for the unemployed tech workers of Chicago, but it remains to be seen how many of them will be interested in working 30 hours a week as volunteers (mostly in the public schools) while also retooling for new jobs (courtesy of the Tech Corps), all for $450 a week.  If they are skilled and there are jobs elsewhere, this is unlikely to keep them here.  And while Public Schools CEO Ron Huberman is a co-visionary on this one, it is hard to see how channeling a steady stream of temp tech teachers through the Chicago Public Schools will benefit students much.

Killing two birds with one stone?

Interestingly, the Chicago Tech Corps idea borrows from non-profit models set up in states like Ohio, Texas and Georgia, where the expressed purpose is to close the “digital divide” in disadvantaged communities.  These non-profits solicit donations from private industry to  provide computers and expert training in the classroom.  Daley’s twist on the model is to use laid-off tech workers to provide the labor, and to commit public resources to attract and retain “desirable” high tech industry to Chicago.

At the end of the day, Daley is betting that he can direct private and public spending better than the free market could have, or even an older, looser model of private-public partnership.  Here Daley is robbing from future revenue streams to “invest” in his vision of what will work for Chicago.  He is picking winners—high tech companies and workers—and even going so far as to reshaping school curricula to make Chicago a prairie-style Silicon Valley.  If he succeeds, Chicago may actually reinvent itself and not just survive but thrive in the 21^st century.  But if he is wrong, Chicago will have lost its chance to evolve more or less organically—with market forces dictating winners and losers—and we will face a future that looks more like Detroit’s.  Remember, they bet the farm on the auto industry decades ago.  How’s that working out for them now?

Got a comment or idea for an article?  Email me at kmkobor@hotmail.com.