A look at economic development from the 22nd century perspective | Eastern North Carolina Now

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

   When the history of America, North Carolina and Beaufort County in the early 21st century is written one of the major issue that will be recalled will be government intervention in private enterprise. Bailouts, subsidies, special tax benefits, economic development grants and incentives...by whatever name you want to call it, it is going to be recorded in history as one of government's biggest failures.

    Here's what our grandchildren will learn from our experience of trying to have the government grow business and commerce: Government is not a very good investor when it comes to picking businesses to invest in.

   Ride down U. S. 17 south of Chocowinity and you see on the right near the intersection of Price Rd. an industrial park that is, as Warren Smith once observed, "brilliantly camouflaged as a cotton field." Take a jaunt down NC 33 to Aurora and you will be no ethanol plant producing environmental saving alternative fuels. Nothing. Zip. Nada. Did not happen. But for the Grace of God what you might have seen had the Economic Development Commission had its way would be a rusting distillery that would have cost the taxpayer more than twenty million dollars, minimum.

   Strike out (no pun intended) US 264 west and near Mt. Olive College you will see off in the distance to your right a huge empty blue building, nestled among other empty buildings and lots. We call this the Washington Industrial Park. Swing down Whichard Beach road and you see the decaying remnants of one of Beaufort County's pride in days gone by--Fountain Power Boats.

   Scan the N. C. Department of Commerce website and you find literally hundreds of empty building that many communities are willing to lease for a $1.00 a year.

   Recent research still in progress at the Beaufort Observer reveals that the failures from hundreds of economic development grants have become so prolific that the Powers That Be have quietly changed the laws dealing with the subsidies such that many are exempt from reporting what they accomplished.

   Then, of course, there's Government Motors. It's in the news now in part because Barack Obama is running around the country campaigning on a platform that he "saved the American automobile industry" with his bailout of General Motors and Chrysler. But the reports keep coming that GM is losing money hand over fist and may indeed have to declare bankruptcy again. Click here to read the latest such story.

   And then, of course, there's the "alternative energy industry." Just about monthly we read about another "green company" going bellyup, after having cannibalized millions of dollars of taxpayer money.

    In case you have not detected it, there's a common thread connecting all of these boondoggles: Bad investment decisions made by government officials using other peoples' money. Read that as mine and your money. Taxpayers' money.

    To be sure there have been some successes. Even a blind hog occasionally find an acorn in the forest. But for the most part what our grandchildren will read in that history is that government officials don't make very good decisions when they try to pick companies to invest in.

    But that will not come as a surprise to our progeny. They will have been taught by their teachers that a fatal flaw in this economic development strategy was that the recipients of these billions of dollars of taxpayer monies were poor investment risk to begin with simply because they were margin or un-viable enterprises to begin with. No bank would have loaned money to most of them based on a business plan that the government officials trumpeted as something that would "save or create jobs."

    And somebody will write a dissertation or book and point out what to these future generations will seem so obvious: The stampede to "create jobs" missed the point. The point was to produce products that customers wanted and would purchase in the free market. Things like iPads, cell phones, flash drives and even computer software such as Yahoo, Google, and even Facebook (or at least its progeny) will be pointed to as "job creators." And some college professor will teach a class in the 22nd century by pointing out that back in the latter 20th century and early 21st century the Pied Pipers of "economic development" fooled legions of lemmings into running over the cliff of "creating or saving jobs" before they learned that jobs are the result of enterprise, not the cause of it. And in the same lecture it will be pointed out that ignorant government officials failed to realize that government cannot control the economy. It can only distort it and eventually someone, usually the taxpayers and intransigent stockholders, has to pay the price.

    "So you see class, what they learned back in the 21st century is that government is not very good at all at picking winners and losers in the economy" the teacher will say.