Gentlemen (Dear Commissioners, October 5, 2012) | Eastern North Carolina Now

    I have made no secret of my belief that the Economic Development Commission (EDC) has been incompetent and amateurish in its approach to economic development. It would have been impossible for the EDC to have failed more miserably or over a broader range of issues.

    In particular, The EDC

    • Has undertaken spending $6.5 million on two (2) industrial parks projects without ever having verified or even examined the research supposedly supporting the need and purpose the parks would serve or the competition such parks would encounter in the region. (Note: It appears that there is a great deal of competition, but no research.)
    • Entered into a multi-year capital expansion program at the industrial parks without any coordinated budgeting or risk assessment.
    • Has never issued a documented and verifiable annual report.
    • Functioned as part of an interlocking chain of authority, whereby, grant recipients were responsible for the review and appraisal of both the economic developer's job performance and salary.

    At the recent county board meeting commissioners delayed finalizing the rewriting of the EDC by-laws. Commissioner Klemm expressed his desire to allow the new economic developer to give his input to the rewriting of the ethical and financial guidelines. Why would the commissioners allow the person who will be reviewed and evaluated under these by-laws to actually write the standards by which the evaluation will be conducted? Does this not open the process up to a self-serving conflict of interest? You are, yet again, putting the "goose in charge of the corn."

    Laying this concern aside for the moment, why was the input from the economic developer not asked for by telephone and the input to rewriting the by-laws not accomplished by the exchange of fax copies? In short, why has this process taken six months not to be completed?

    Finally, the history of economic development in our county has been to employ matching grants, loan guarantees and various other strategies which are, in effect, no more than gifts to private parties and stealth taxes levied on the county's remaining residents. This needs to stop. The cost has been devastating (see comment in post script). Those tax revenues that local taxpayers have sent to Raleigh need to be repatriated to Beaufort County. However, in those cases where matching funding is required, the recipients of these grant distributions should be able to present a business plan to the economic developer which has enough merit to warrant the business owners providing their own financing of the "match".

    Regards,

    Warren Smith
      Beaufort County


    PS:     "The key to understanding the falsehood of contrasting austerity budgets with promotion of economic growth is simple enough. First, whatever a government spends, it must first take from taxpayers and buyers of its bonds. Thus unless a government borrows from nonresidents or the country's central bank, there is merely a one-to-one substitution in spending between the private sector and the government sector. Contrary to Keynesian mythology, therefore, increased government spending, whether financed by higher taxes or borrowing from domestic residents, does not change total spending, or so-called aggregate demand. By the same token, decreased government spending does not reduce total spending. Whatever the government does not take from the public to spend is retained to be spent by the taxpayers or the potential government bond purchasers.

Second, individuals are far better at managing their own funds or investments (out of savings) than government bureaucrats entrusted with spending tax dollars or funds collected from the sale of government bonds. Thus even though increased government spending does not change total spending when funded with tax dollars or domestically borrowed funds, it increases the share of total income or gross domestic product (GDP) entrusted to government bureaucrats and decreases the efficiency of the economy's functioning and its growth. Austerity--that is, cutting government spending--particularly when revenue collection has decreased, is thus the rational path to reducing the inefficiency drag that most government spending has on an economy." - John Ahiakpor, California State University