Orr on economic development
Our friend from across the aisle, Bob Orr, wrote a good op-ed piece on the business of economic development in the Charlotte Observer today.
In addition, if we make it easier for existing North Carolina companies to grow and make North Carolina an ideal environment for start-ups, our economy will be successful. We have spent millions trying to lure the next Google here with tax credits and payoffs. I don't want the next Google to be lured here; I want it to be born here.
Orr is mostly right in his positions on economic development. If he'd added in a call for a sharper focus on jobs related to specific industries, the story would have been even stronger. The green economy, in particular, has to be front and center in any long-term economic development strategy.
James
PS Latest polling shows a narrowing race in the Republican primary between Pat McCrory and Fred Smith. Orr and Graham seem out of contention. So we'll either get "Myers Park Pat" representing Big Energy, or Fred "The Asphalt King Smith" representing himself. How sad is that?
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McCrory has something to say too
But like Smith, Graham and the rest of the GOP Puppetshow, the only thing of substance he has to say is cut taxes.
Go for Green
Most economic development people in the state are still talking about biotech and how it will be our savior. The problem is that pretty much every other state has their hopes on biotech too. "Green" is pretty hot these days and we could stay a little ahead of the curve if we go for it and stop praying to the biotech gods.
Right.
Some concentrated public policy and incentives for companies in the environmental economy could really accelerate NC's competitive position.
In my view, it would also be smart to hedge just a bit. Maybe create similar incentives and policy or the entertainment and communications industries (film, music, games, technology, publishing, digital media, etc.).
We don't need focused development.
Focused development is hugely inefficient, particularly in the long-run. The keys to development are a kick-ass education system, kick-ass infrastructure, a low and unburdensome tax code, and low regulation. (I would prefer replacing the property rights litigation approach to the regulatory approach, but I'm never going to be dictator.) Then you will have an environment where you'll have a booming economy with lots of job and business creation, and you will have the emergence of green industries. The free market will work just fine if we trust it and the government does what it really can do to improve the economy. (Education, infrastructure, and property rights/contract enforcement.)
Particularly, I'm really worried that the country is loosing its true economic edge in the world, which is the skill of America's entrepreneurs. There's a really good book out by Carl Schramm called the Entrepreneurial Imperative that discusses this. This is where education policy can make a big difference. There's lots of talk about producing engineers, doctors, etc.. But the only way to have true growth is to produce the entrepreneurs who create the businesses and jobs in the first place.
Back to the topic of the thread, though, Orr is my man. I have never met a smarter and more interested candidate for North Carolina Governor. I will for sure be voting for him this week when I go in for early voting. If the GOP would start running more candidates like Ron Paul, B.J. Lawson, and Bob Orr, we would be in good shape.
Just a few points:
It's kind of hard to get the first two with the third thing in place. Now, I know you can answer that by pointing out how huge the state budget is, and how cutting a lot of the entitlements and/or patronage-based "projects" would free up a lot of money for education and infrastructure. But that's a lot easier said than done, and tens of thousands of low-income North Carolinians would suffer in the process.
A side question: as a Libertarian, you probably believe in pushing governmental authority down to the lowest levels (local & municipal), where people really know what's needed. How do you feel about local governments being able to levy taxes & fees on local businesses, without being burdened by State regulations and statutes?
Does this apply to environmental regulations dealing with air & water quality, hazardous chemicals/materials usage/disposition/reporting? How about worker safety regs?
Responses....
"It's kind of hard to get the first two with the third thing in place. Now, I know you can answer that by pointing out how huge the state budget is, and how cutting a lot of the entitlements and/or patronage-based "projects" would free up a lot of money for education and infrastructure. But that's a lot easier said than done, and tens of thousands of low-income North Carolinians would suffer in the process."
1) Yeah. I'd like to cut lots of the government. But we can also fund them by having different taxes. Instead of having income and broad-based consumption taxes, tax negative externalities. You will still be able to get enough revenue, and you will have an economically more efficient tax system (since the costs of externalities will be reduced to an efficient level) and a tax system more justified by the proper role of government. (Which is to protect property rights. Negative externalities ultimately are damages to private property.) I'm not as comfortable with some other excise taxes, but given substitute goods, I would say they are voluntary enough.
Regarding the harm done to low income people, well, I would say they're getting harmed quite a bit by state income and sales taxes already. They're getting harmed quite a bit by lack of property rights protection. They're getting harmed quite a bit by a terrible education system. Almost every economist agrees that the way to get low income families out of poverty is to have a top notch education system. Welfare programs simply don't work. At the national level, social spending has increased 3x as a percentage of GDP since 1962 (I'll be happy to back up those numbers for you, but in short, I use historical tables from the FY2008 budget and sum together categories of spending that could be characterized as social spending), and yet the income gap and the level of poverty has increased.
"A side question: as a Libertarian, you probably believe in pushing governmental authority down to the lowest levels (local & municipal), where people really know what's needed. How do you feel about local governments being able to levy taxes & fees on local businesses, without being burdened by State regulations and statutes?"
I'll be honest, I'm not sure how I feel about it. Sure, you can say that local government can be more efficient at addressing concerns. But there can also be lots of corruption and insufficient competence at the local level, as well. We see this a lot with local school boards. Regarding education in particular, I would like to see the state government take a stronger role, at least on the funding side. There are lots of educational inequalities in North Carolina, and a lot of this is the result of the wealth distribution of localities. I grew up in North Raleigh, which is an affluent area by all measures. When I went to tutor public school students in downtown Durham a couple of semesters back as part of an Honors Seminar, I felt like I was in a different world regarding the educational environment. I think a lot of libertarians would disagree with me on this, but I think in this instance, it's important that the state government take a stronger role in the funding of public education.
"Does this apply to environmental regulations dealing with air & water quality, hazardous chemicals/materials usage/disposition/reporting? How about worker safety regs?"
I don't like the regulatory approach to issues like this. I think we can address these issues through negative externalities taxes (which will charge penalties for, say, water effluent and pollution, and correct for one vice of the market I do acknowledge, which is the failure of market prices often to include the value of damages) in defending private property rights of others. Private property and contract law need to be vastly beefed up.
Regarding worker safety, these are issues that need to be dealt with through the formation and enforcement of contracts between employer and the employed. However, you will be happy to know that I do not share many libertarians' hatred of unions. In fact, I like unions. A lot. Unions have every right to exist due to the principle of freedom of association, and they correct for market inefficiencies that exist in cases of monopsonistic employers. I'm even against Right to Work laws because they interfere with private contracts. I don't get how a lot of fellow libertarians can say that natural monopolies are fine and shouldn't be messed with, and yet unions should be scrapped.
In theory, this might work:
But here's the problem, and I believe it is an insurmountable one: those who benefit (financially) from causing harm to another are better able to wield influence over whatever system is put in place to "even the score" (if you will) than the party who was negatively impacted.
We see this type of influence all the time, in both the public and private sector, and (usually) the only way to keep it in check is through regulation/statute. That in itself is difficult, due to the pressure this influence can have on lawmakers. But thanks to the scrutiny of taxpayers, this influence must work in the shadows.
One might observe that, if the only way the state could bring in revenue was based on this, it would be more vigorous in the pursuit of these "fines", thus protecting the less-monied. But it could also go too far by assessing negativity where none exists, simply to enhance gross revenues.
Frankly, this system would rely (even more than our current one) on human factors, which would inevitably result in an inequitable (and inadequate) collection of revenues.
I'm afraid this would be totally ineffective, and set worker safety back to pre-labor movement levels (unless unions were ubiquitous). The lone worker will (almost) always be at a disadvantage to his/her employer at the negotiating table. In rural areas jobs are scarce and the worker(s) often have only one or two options for employment. In larger population centers, workers have to desperately compete with each other. In both scenarios, the employer is in a much better position to dictate terms of any contract.
While labor unions can be effective in evening the balance, in the absence of a nationwide mandated labor union network, hundreds of thousands of workers would be exposed to unnecessary dangers with a lack of government safety regulations.
Here's the thing, Michael: many Libertarian theories rely upon most individuals to behave a certain way in the absence of restrictions, and provide clever and creative methods to correct behaviors that don't fit the plan. Much of this theory assumes that the average person is limited by authority and would excel in the absence of it. This may be demonstrable on the micro level, but the unbelievable success of our nation and our citizens' quality of life is overwhelming proof to the contrary.
Which is probably why there aren't that many Libertarians. :) Just kidding.
This is a lot of work, pal. You're like a date that wants you to meet her family every single time you go out, and they're always full of questions that you know they know the answers to already. ;/
re:
"But here's the problem, and I believe it is an insurmountable one: those who benefit (financially) from causing harm to another are better able to wield influence over whatever system is put in place to "even the score" (if you will) than the party who was negatively impacted.
"We see this type of influence all the time, in both the public and private sector, and (usually) the only way to keep it in check is through regulation/statute. That in itself is difficult, due to the pressure this influence can have on lawmakers. But thanks to the scrutiny of taxpayers, this influence must work in the shadows."
Which is why you have strong legal measures to restrict influence over government. I think we can both agree that these don't exist. Libertarianism isn't inherently against this.
It works in the shadows whether or not you have a regulatory state. With a regulatory state, influence has potential to be MUCH more damaging, and it often is, because the state will then have legitimized means through which to restrict competition through disparity in codification and enforcement. Furthermore, large corporations love the regulatory state because it inherently squeezes smaller competitors.
"One might observe that, if the only way the state could bring in revenue was based on this, it would be more vigorous in the pursuit of these "fines", thus protecting the less-monied. But it could also go too far by assessing negativity where none exists, simply to enhance gross revenues."
You cite in the paragraph above the power of the "scrutiny of taxpayers." Why would you expect it to be ineffective in providing a check against abuse of the concept of negativity?
"Frankly, this system would rely (even more than our current one) on human factors, which would inevitably result in an inequitable (and inadequate) collection of revenues."
How? Larger corporations and richer people use more resources and generate vastly more negative externality. They'll certainly pay more. I don't even see how there could be a question about equity concerns.
On the adequacy of revenues, I don't buy that argument at all. Negative externality occurs on a huge scale. Enforcement in some cases may be hard, but there are ways to get around it.
"I'm afraid this would be totally ineffective, and set worker safety back to pre-labor movement levels (unless unions were ubiquitous). The lone worker will (almost) always be at a disadvantage to his/her employer at the negotiating table. In rural areas jobs are scarce and the worker(s) often have only one or two options for employment. In larger population centers, workers have to desperately compete with each other. In both scenarios, the employer is in a much better position to dictate terms of any contract.
While labor unions can be effective in evening the balance, in the absence of a nationwide mandated labor union network, hundreds of thousands of workers would be exposed to unnecessary dangers with a lack of government safety regulations."
In the first paragraph, you assume perfect immobility of workers from rural areas to urban/suburban/wealthier areas. I would contend that this in no way exists.
Secondly, there is no need for a "mandated" union network. There is every incentive for workers to come together and collectively bargain. The problem isn't mandate; the issue is keeping the government out of the way of unions where they get in the way. One of the big problems during the late 1880s when unions first started forming was that government at all levels was deterring them at the behest of employers, via outlawing unions, using police to break up strikes, etc..
"Here's the thing, Michael: many Libertarian theories rely upon most individuals to behave a certain way in the absence of restrictions, and provide clever and creative methods to correct behaviors that don't fit the plan. Much of this theory assumes that the average person is limited by authority and would excel in the absence of it."
It depends on the libertarian theory you cite. I make some assumptions, but I don't see anything divine about them. Frankly, I think socialist theory relies much more on assumptions and makes a lot more bad assumptions than libertarian theory. Chief among them is the assumption that policies can be devised to perfectly manage the economy and correct most ills, when in fact they themselves create lots of ills, many of them they end up trying to resolve with policies.
But on the specific counts you cited, your right. I believe very much that the average person is limited by OVERBEARING authority and could do better without it. I'm not advocating abolishing government; I'm advocating government that is limited in its scope, which is to protect private property, enforce contracts, protect from coercion of life and liberty, and (with just and efficient funding mechanism) provide public education and infrastructure. Quality public education, in particular, is hugely necessary. It's been demonstrated to be the unquestionably best way to reduce poverty and give people the tools they need to succeed on their own.
I also do believe that private organizations and efforts can be much more effective at reducing poverty and promoting social progress than government programs (aside from education). Here's the thing: when government steps in to attempt to resolve issues under a "compassionate" banner, the result is hardly compassionate in doing so, and it's hugely inefficient. Furthermore, it reduces the motivation for private agents to invest effort and energy in pursuing a cause; after all, if the government is going to take it up, why bother? Compassion is systematically reduced, because it's someone else's issue and someone else is paying for it. In order to make substantial social change, it requires huge numbers of highly motivated people working together. It's only in this type of scenario that true, lasting social change can occur, and it's only in this type of scenario that the naturally-emanating compassion that is necessary to achieve compassionate ends can flourish and be sustained.
"This may be demonstrable on the micro level, but the unbelievable success of our nation and our citizens' quality of life is overwhelming proof to the contrary."
Unbelievable success? Is it unbelievable that the market power of large corporations has grown more and more while smaller competitors have been swamped out of the market by the tax and regulatory codes? Unbelievable that oil and food prices continue to skyrocket as a direct result of central planning? Unbelievable that the income gap has continued to rise and the standard of living for those in the 1st and 2nd quartiles of the distribution continues to deteriorate? Unbelievable that in the process we've accumulated a $9 trillion government debt (with total country debt over $50 trillion, and that's not even counting the government's unfunded liabilities) with a currency that is headed down the toilet? Sure, some great things have happened; I'm not disputing that, in the short-run, central planning can do some good things. But in the long-run, due to its inherent inefficiency, it just simply fails. And we're headed down that path.
Furthermore, just because things have been good for a while doesn't mean that they will continue to be good, that they couldn't have been better, or that they can't get better. I always get frustrated when people use the old "It ain't broke, so don't fix it" argument. Usually when people make that argument, they display a negligence that has likely led to the beginning of a break, they don't have the foresight to see when a break comes, a they don't have the preparation to deal with the break when it does come. Sorry, but I'm not content in letting other people dictate the terms of my economic transactions and, if things happen to be going well, shutting up and being happy.
"Which is probably why there aren't that many Libertarians. :) Just kidding.
This is a lot of work, pal. You're like a date that wants you to meet her family every single time you go out, and they're always full of questions that you know they know the answers to already. ;/"
I'm not nearly as sure as you seem to be that you know the answers to all of these questions. Be careful with glib comments like this. I'm passionate about this stuff. I sleep little, I run on 5 cups of coffee a day, I'm freaking stressed about exams, and I'm politically and sexually frustrated. You're playing with toxic chemicals over here, dude.
Oh, and I go by Paige.
It's about being invested in the system
If we implemented the revenue-gathering process you're talking about, the average person's tax burden would be reduced to little or nothing. Ergo, they would have much less personal interest/concern in the way (fairness) the funds are collected and distributed. As you say:
That's what I meant about taxpayers keeping tabs on government. If they're not invested in the system, they won't care if the system becomes unfair.
Chill out, okay? It was a fricking joke, mixed with a complement about the complexity of your argument. You're about to lose one of the only people here who has the energy or interest to engage you in a discussion.