Opinion: Daily Journal

Is Leadership Nigh on the Economy?

RALEIGH — Senate leader Marc Basnight and other key state legislators are starting to show some leadership on the issue of North Carolina’s anemic economy.

You read that right. Basnight and the others announced Wednesday the formation of a Joint Select Committee on Economic Growth and Development, comprising 20 members in both chambers with a mandate to propose a set of growth-enhancing reforms in time for the 2004 session in May.

Ideas for study include revisiting the state’s targeted-incentive policies, aiding small businesses, and speeding up the regulatory process. If guided by the best available evidence on what makes state economies prosper, the select committee should conclude that 1) across-the-board reductions in corporate and personal income taxes would do more for job creation and business bottom-lines than targeted incentives, 2) small businesses are disproportionately hurt by government fees and regulations, and 3) lengthy delays for receiving permits are affecting not only private business investment but also the completion of major highways that could open up portions of North Carolina to new economic opportunities.

Will state lawmakers on the panel be willing to admit past mistakes? That’s the main problem with turning the state’s policies away from special-interest stroking and towards a more risk-taking, entrepreneurial economic climate. To abandon targeted incentives in favor of tax-rate reduction would be to anger a number of groups with a vested interest in the status quo — not to mention embarrass some legislators whose past handiwork would be undone.

Similarly, to streamline the regulatory process — and possibly offer some additional relief in areas where rules of questionable value are socking small firms — would be to risk criticism from the environmental-extremist crowd and the state’s major newspapers. (You know, I should be more economical in my use of words. The term “environmental-extremist crowd” accurately describes both groups.)

Leadership requires a willingness to take risks. Perhaps North Carolina’s pitiful performance vs. the rest of the national economy (which is now clearly on an upswing) has formed a challenge to which our politicians will rise.

One can only hope.

Hood is president of the John Locke Foundation and publisher of Carolina Journal.