No time to relive glory days

Feb. 07, 2013 @ 04:19 AM

Although Raleigh is a much different state capital than it was when I started writing about politics in the late 1980s – the ratios of plaids to pinstripes and of diet sodas to high-test soft drinks have shifted markedly – there remain a large number of lobbyists, journalists, and politicos around town who still venerate “the good old days.”

Most but not all are Democrats. Most but not all have graying temples, slowing gaits, or other indicators of veteran status. And most but not all of them are genuinely shocked at what they are hearing from new Gov. Pat McCrory, House Speaker Thom Tillis, and Senate leader Phil Berger.

They can’t believe that anyone would question the cost-effectiveness of taxpayer spending on the current structure of the University of North Carolina. They can’t believe that anyone would devote significant political capital to reforming the state’s antiquated tax code (past governors and legislators have found talk of tax reform more attractive than actually doing it). They can’t believe anyone would say no to “free” federal money.

“Back in my day,” they say, with all the pathetic pomposity of a 40-year-old reliving his glory days as the star quarterback at Tar Heel High, “we understood that North Carolina was different. We were different from the rest of the South in that we didn’t think government was too big. We saw bigger budgets as a sign of progress, as an indicator that we were investing in public services rather than just cutting taxes and regulations.”

Well, yes. North Carolina has been different in the past. We have imposed relatively high marginal tax rates, generously funded a higher education system with a low rate of cost-effectiveness by national standards, and imposed sweeping regulations. Our model was to centralize power, control government finances and policymaking out of Raleigh, and treat businesses as cash cows or political vassals rather than as dynamic job creators and consumers of public services.

But this is hardly a model worth defending. It has made North Carolina uncompetitive. That’s why rewriting the tax code, reforming the regulatory process, and bringing our education policies in line with 21st-century realities are high priorities for the new leadership in Raleigh – and why the previous generation of North Carolina leaders don’t seem to comprehend what is going on, and why.

Here is the blunt fact of the matter: North Carolina’s traditional approach to public policy has failed. We have one of the worst-performing economies in the United States. It has been lagging behind the regional and national averages in economic performance for many years now. Our U-3 unemployment rate for December was 9.2 percent. That’s the highest jobless rate in the South, and one of the highest in the country.

The political establishment may ridicule the likes of Tennessee, Alabama, and Texas all they want. But these are places where incomes are rising more quickly, and unemployment is lower, than in North Carolina. Even South Carolina, which had a similarly miserable experience to ours at the onset of the Great Recession, has posted a stronger economic recovery. Its unemployment rate was 10.7 percent in December 2010, vs. North Carolina’s 10.6 percent. Now South Carolina’s rate is 8.4 percent, vs. our 9.2 percent.

“But why are you comparing our beloved North Carolina to these Deep South economies?” the political class asks dismissively. “We are in a different class entirely. We’re more like Virginia and Colorado.”

Uh, no. Virginia and Colorado both have smaller governments, lower taxes, less-generously subsidized university systems, friendlier regulatory climates, and stronger economies. Although Virginia’s statewide unemployment rate of 5.5 percent is artificially low because of federal employees in Northern Virginia, other regions of the state are still outperforming North Carolina.

Look, I don’t begrudge folks their memories. By all means, reminisce away. But while you are reliving your high-school glory days, the rest of us are trying to win some games this season. Mind if we get back to it?

 

Hood is president of the John Locke Foundation, which has just published First In Freedom: Transforming Ideas into Consequences for North Carolina. It is available at JohnLockeStore.com.