RALEIGH -- In the wake of the North Carolina General Assembly's egregious blunder this week, the overwhelming passage of corporate-socialism bill offered by Gov. Mike Easley, I was struck by the reasons that some of the members gave for supporting the very incentives policies they know to be wrongheaded.
One said that he had no choice, because "everyone else was going along with it." Wow, what a statesman. Another was at least parochial enough to say that he expected the package to create additional tobacco-production jobs in his district. But most members, who surely knew better, offered as their justification a "Hail Mary defense." Because of the desperate state of North Carolina's economy, they said, anything that promised to create jobs was worth trying.
Essentially, these paragons of political virtue simply panicked. They were afraid of doing nothing, afraid at least of being perceived as doing nothing. So they voted to offer big tax breaks and grants to a few companies while in effect telling the rest of the state's business community to stop whining about unfair treatment (or to come up with their own dubious job-creation scheme to be subsidized, an invitation likely to be answered in the coming months).
Panic is rarely an emotion that leads to sound decisionmaking. Perhaps out on the tundra, clad in animal skins and holding a flint-tipped spear, facing mortal danger at any moment, our progenitors enjoyed an evolutionary advantage if they were alert to the slightest hint of trouble and hard-wired to react viscerally -- and to flee quickly. But sociobiology is no longer operative. Study, patience, and deliberation are the keys to sound long-term decisions, be they in the household or in public life.
Panic has led North Carolina politicians to make a number of misjudgements in recent years. For example, panic about the fate of Eastern North Carolina led lawmakers many years ago to locate the Global TransPark project in Kinston rather than in a more fitting (and urban) location where it might have had a chance to accomplish its initial promise. Now that it appears Boeing is about to announce its final decision to build its new 7E7 plane in Everett, Washington instead of Kinston, there will probably be another round of panic. Sure, it is well past time to be panicky about the future success of the TransPark itself, since the project so far has fell short of the promised goal of 48,000 net net jobs in North Carolina -- by 1998, though who's counting? -- by approximately 48,000. But apart from true believers and civic boosters, few thoughtful people should have ever expected the GTP to solve Eastern North Carolina's problems. These problems are serious and chronic, but panic won't help to solve them.
More recently, panic about the future of Piedmont and western counties long dependent on traditional manufacturing industries has been leading some business leaders and politicians to abandon their long-held beliefs about free enterprise, low taxes, and less governmental regulation in favor of flirtations with government planning, high taxes (in the form of tariffs or quotas), and protectionism. Again, many know that their emotional response will do little to make their firms more productive and competitive in a world of inevitably falling barriers and inevitable widening trade. But they set aside what they know intellectually to indulge the all-encompassing feeling they have that "somebody" better do "something" fast.
As bleak as the outlook is in some quarters, and as unhelpful as our state government has been in many ways, there is no cause for true panic about North Carolina's future. Our state remains blessed with so many wonderful qualities and attractive amenities. Our people are hard-working, hard-headed, and hard to keep down. With the right mix of long-range fiscal and public policies -- devised carefully and with thoughtful consideration of the available evidence about what makes economies grow -- North Carolina can return to its position as a dynamic leader in the regional and national economy (right now, Virginia, Tennessee, Georgia, and Florida are the regional pacesetters, not the Carolinas or the Deep South states).
State legislators who voted for the incentives bill this week out of conviction were just mistaken. But those who voted for the bill out of panic, knowing in their heart of hearts that it was poor public policy with little hope of making much of a difference, are frankly harder to excuse.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.