Conventional Economic Development "Seriously Flawed" Says Federal Reserve Official

One of the best investments state and local governments can make with their public dollars is in high-quality, parent-involved early childhood development programs, an early education and economics expert told a local conference of educators Thursday.

Arthur J. Rolnick, senior vice president and director of research at the Federal Reserve Bank of Minneapolis, said governments, in hopes of job creation, conventionally promote economic development by spending billions of public dollars in subsidies to get private companies to either locate or expand their business.

From a national perspective, however, new jobs aren't created, Rolnick said, they simply move from one location to another.

"The conventional economic development in this country is seriously flawed,'' Rolnick said. "Billions of public dollars are spent on job creation with zero public return. ... This is the wrong way to do economic development.''

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