The State of the Union, the State and our County | Eastern North Carolina Now

    Publisher's Note: This article originally appeared in the Beaufort Observer.

    The Federal government (i.e. Barack Obama) has spent over four trillion dollars attempting to stimulate the economy. Some of that money has had a tiny bit of success but overall the approach of relying on government spending and wealth redistribution has been a miserable failure. Unemployment has remained at near depression levels and in many sectors of the economy and areas of the country as well as specific demographic groups it exceeds depression levels. The result of the spending is the most massive accumulation of debt in the history of our nation. That debt threatens the very existence of the nation. Yet it is reported that an estimated trillion dollars sits in business bank accounts while those businesses are reluctant to invest in new means of production.

    The same could be said for the State of North Carolina and Beaufort County. Unemployment remains chronically high. The approach the state and county have used can be described as "subsidizing job creation." The problem at the state level and in Beaufort County is that the use of subsidies to select businesses has had virtually no overall impact on jobs, economic growth and development. Those supporting the subsidy approach are reduced to defending it by claiming, without substantiation, that "things would have been worse had we not."

    We are now headed into the election season. Filing for office is next month. We have already had two local politicians file claiming that they will work to improve our economy. But what they talk about is the same failed policies of the past...subsidizing select businesses.

    Warren Smith has amply proven that Beaufort County has thrown more than eight million dollars into this failed approach over the last few years. Even if it did create a few jobs those jobs cost the taxpayers more than they produced. The eight million has certainly not turned the economy around, even for the businesses that got the money. More of them fail than succeed.

    We commend any politician who wants to help improve the economy. It is the most severe problem we face in this county, state and nation at this time. We all need to be committed to turning the economy around. But we don't hear hardly any specific, detailed proposals for doing that. But there are some.

We would propose that what is needed is a paradigm shift in our approach to economic growth (of existing business) and development (fostering new enterprises). The new approach can be simply stated, if not simply obtained: Focus on facilitating productivity.

    By productivity we mean focusing on the means of production. By that we mean, mainly four things: making capital available to all viable businesses, not just a select few; creating and sustaining a productive-friendly business climate; workforce development and innovation/technology.

    To make capital more readily available, the government can best do that by broadening the risk pool for lenders. But the critical ingredient here is equal access. Access to capital ought to also be efficient.

    Secondly, we should create a productive-friendly climate in the county, state and nation. Business should be supported in making profits, not punished. The tax system should be dramatically revamped to encourage business to make higher profits while promoting expanded competition. We should begin working toward phasing out the corporate income tax and lowering or eliminating the capital gains tax to promote private investment in the means of production. The County should do the same thing for personal property (businesses' means of production). At the national level we should cease and desist from the government trying to manage the allocation of economic resources and leave that job to the free market, with government only preventing abuses, not favoring one sector or picking winners and losers. And that should begin with a total revamp of our energy policy with the goal of providing ample energy to support economic growth and development.

    Thirdly, we must focus most of government's efforts, particularly at the county and state levels on human capital. What we mean by that is predominately two things: Removing disincentives to be productive and dramatically improving each person's marketability.

    Removing disincentives, such as extended unemployment and the Earned Income Tax Credit and other such programs that pay people not to work, or work less than they are capable of, both in terms of time and performance must be done and done immediately.

    Improving marketability of every person also means a major revamp of our educational system. In our elementary and secondary schools we need to do more to maximize the performance of our best and brightest students and to move more into that category. We now do a good job with handicapped students but we do very little to help more students perform at the highest levels of their age group.

    Our university systems need the most work. We have entirely too many programs teaching students things that they cannot use to either make a living or help grow the economy. We have entirely too many students enrolled in our colleges and universities, particularly in the first two years. We should shift the first two years of college to the non-residential community college system and raise the admission standards into the junior year as well as graduate and professional schools. State funding of our universities should be shifted to supporting primarily academic programs and much less on ancillary programs and administration.

    We need to beef up our community college trades and technical programs. This is perhaps the most critical need, as we see it, now. Workforce development should be a major priority at the county and state levels. Anyone on public assistance should be required to enroll and make satisfactory progress toward on-time completion unless they are disabled. We need stronger and more effective partnerships (cooperative education) between business, college and government.

    But above all we need a paradigm shift in what we value and reward. And that should be excellence. We need to insure that those who aspire to being the best at what they do and doing the best things are rewarded. And that includes teachers. At all levels.

    Fourthly, and this applies primarily at the Federal level, we must focus on innovation and technology. Government should adopt annually no more than six areas of innovation and fund primarily research and development of technologies that are made freely available to any entrepreneur for development. The measure of what to fund should be disciplined by being tied to results. And by results we mean those activities that achieve the most productivity supporting economic growth and development.

    The day will come when we can shift our focus on the utility of productivity in what the Federal government funds, but until unemployment is below 5% we should focus only on things that produce economic gain.

    Barack Obama will once again miss the point tonight. What he will focus on is government. What he should be focusing on is making this nation more productive and the way to do that lies not in Washington but in each individual American. He will likely propose more government. That is not what we need, except to the extent that what the government is doing is making each American the most productive we can possibly be. In a cliche, the point he will miss is that what he should be doing is putting America to work and that means putting more American working at their maximum potential. He will not solve this problem. Government will not solve this problem. Government IS the problem.

    The reader has probably already concluded what we will close with. What we need to do in this country, state and nation is to build a system, at all levels, which maximizes the success of the individual....the individual business and the individual worker. We have entirely too many resources going to waste, not the least of which is millions of our people. If those who are now relatively unproductive become productive that will not only improve their, and their family's, life but in the process they will be more prolific consumers and that will drive economic growth and development. Of such is what our Founders meant when they talked about the "pursuit of happiness" and they meant it not for a select few but for every single individual.