RALEIGH -- Everyone knows that North Carolina has been undergoing some wrenching economic changes and bumping up against some significant contraints to our growth and competitiveness. Traditional manufacturing industries such as textiles and furniture are facing heightened international competition and implementing technological changes, both resulting in lower demand for low-skill labor.
Traditional agricultural industries such as tobacco production have been declining within an environment of ever-tightening government regulation.
Non-traditional -- that is, new -- industries such as consumer electronics, fiber optics, software, and telecommunications have also undergone significant churning in recent years as overbuilding led to production gluts and excess labor.
On the macro side of things, North Carolina's tax and regulatory systems have become increasingly burdensome, reducing the real rate of return on investing and building businesses in the state. Our overburdened highway system now has some of the worst urban traffic congestion in the United States and offers a bumpy ride on some of the worst rural roadways you can find. Improvements in educational attainment haven't yet caught up with rapidly escalating demands for skilled labor, leaving swaths of young people without the knowledge and adapability needed to prosper in today's world.
Some may think that North Carolina politicians have been paying little attention to these distressing trends. But they'd be wrong. Our leaders have been working tirelessly on a strategy to respond, a strategy based on the best-possible analysis and predictions by the smartest and most well-connected economic-development "experts" money can buy. And now, as of a big-league press conference on Wednesday, the solution has emerged.
They've come up with a five-year plan.
Yes, it's a tool with a fabulous and rich history of economic achievement. Why, whole countries have developed their workforces and industrial sectors with their trusty five-year plans, which leave little to chance, rely on enlightened and public-spirited experts, and avoids all the messy and wasteful activities that come when you don't let them plan skillfully and carefully for the future.
Go ahead and breathe a deep sigh of relief. Your government has a five-year plan.
It centers around the biotechnology industry, which everyone with any real expertise knows will the linchpin of the 21st century economy. At a press conference Wednesday to release the plan, conveniently offered up to Gov. Mike Easley by the North Carolina Biotechnology Center, former Gov. Jim Hunt spoke for all the assembled economic experts in the room when he said that the biotech industry “has more potential to build the economy and provide good jobs in this state for years to come than anything else that has happened.” Indeed, one might venture to guess that Hunt, Easley, and the other notables have now moved the bulk of their own personal fortunes and retirement nest-eggs into early-stage biotech stocks, guaranteed as they are to go ever upward.
It's a sure thing, you see. We have a five-year plan to prove it.
Over those five years, the plan calls for North Carolina to spend $650 million to set up training centers, expand funding for the University of North Carolina system (reportedly teetering on the edge of insolvency), and offer direct funding and indirect subsidies to biotech companies and start-ups to be determined later by said economic experts. The money would come from taxpayers, from people who have irresponsibly failed to claim their cash from the Escheats Fund, and from retired and soon-to-be retired teachers and state employees who will no doubt be thrilled to risk the security of their pension funds on speculative ventures to create jobs in the biotechnology and/or lobbying-for-even-more-largesse industries. The completion of the five-year plan, proponents say, will result in tens of thousands of new jobs created over the next two decades.
Skeptics might question whether politicians have any business trying to pick winners and losers in the economy, whether politicians have any business sacrificing the potential rate of return on state investments and pension funds on the altar of supposed “economic development,” and whether hundreds of millions of tax dollars might better be spent improving core state services and reducing the tax burden so that all businesses, regardless of sector or political connection, will have a better chance to prosper, grow, and employ more North Carolinians — a policy similar to diversifying an investment portfolio instead of betting the farm on a couple of trendy growth stocks. These skeptics might also note that state politicians have a history of promising economic bonanzas from all sorts of dubious schemes, from unneeded infrastructure to magical research spin-off machines, and then escaping responsibility for the resulting boondoggles. Finally, they might point out that the central-planning thesis of the biotechnology-bonanza flim-flam is decades out of date, reflecting little understanding of why individuals better communicate their disparate and subjective demands for products and labor in a decentralized and ever-changing marketplace than in a government report or econometric formula.
But these skeptics probably haven’t read the five-year plan. No doubt they will, and will have a change of heart, as soon as it is fully translated from the original Bulgarian.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.