Would You Relish Running on This?

RALEIGH — Judging by the ubiquitous nature of fundraisers, meetings, and political chatter, now is the time that North Carolina politicians are scoping out their potential opposition and mapping their political strategy for re-election in 2004.

And judging by what I’m hearing and seeing, many of these incumbents are mighty nervous.

It’s not hard to see why. Whether you’re a local official, a state legislator, a Council of State member, or Gov. Mike Easley (virtually all members of Congress are excluded from this list, having safe seats), the prospect of seeking voter approval to do in the next term what you did in the last term is not exactly a welcome one.

Consider what has transpired in North Carolina since January 2001:

* North Carolina has posted a net loss of 84,000 jobs (using non-seasonally adjusted data because it facilitates the most comparisons). This is by far the worse performance in the South and one of the worst in the United States. Indeed, even during this period of national economic recession, virtually all of our fellow Southern states added jobs from January 2001 to September 2003, including Georgia (50,000 net gain), Virginia (40,000), and Tennessee (15,000).

* The picture looks even bleaker if you narrow the focus only to private-sector jobs. North Carolina’s 100,000 net loss, representing 3 percent of payrolls, is far larger than any other state’s. Again, places otherwise similar in many ways have actually gained private-sector jobs during the period, including Georgia (16,000) and Virginia (34,000), though in the latter case proximity to the federal government in Washington, D.C. has played a role even in the private-sector numbers.

* Fretful incumbents may try to pawn North Carolina’s bad economic record off on President George W. Bush or national economic conditions, but I don’t think it will fly. While increased competition and technological innovation have worked their way through the state’s traditional manufacturing industries and reduced payrolls dramatically, that’s only part of the story. Yes, North Carolina loss of 140,000 manufacturing jobs during the period was the largest in the region — more than a quarter of all manufacturing jobs lost in the entire Southern region were in the Tar Heel State — but in percentage terms the magnitude of North Carolina’s loss (19 percent) isn’t wildly out of line with that of the region (14 percent). The difference is that in every one of our peers, job growth outside of manufacturing has significantly or fully offset the loss of manufacturing jobs.

In Arkansas, Florida, Georgia, Tennessee, and Virginia, the number of private non-manufacturing jobs created from January 2001 to September 2003 was greater than the manufacturing jobs lost. Alabama, Mississippi, Louisiana, and South Carolina offset most of the job losses with job growth. But in North Carolina, new private jobs added up to only 29 percent of the manufacturing jobs lost. And it’s hard not to draw the conclusion that factors such as North Carolina’s relatively high tax rates, unfavorable regulatory structure, and infrastructure challenges are at least partially to blame for this discrepancy. The trends affecting manufacturing employment are long-term and only modestly determined at the state and local levels. The same cannot be said for job creation in trade, transportation, finance, personal services, health care, and other non-manufacturing sectors.

* The picture is little different if you look not at employment but at income growth. Since January 2001, North Carolina’s personal income grew by about six percent — the slowest rate of growth among the Southern states. Deep South “powerhouses” like Mississippi and Louisiana posted significantly healthier growth rates. That’s a major blow to North Carolina’s nationwide prestige and its internal cult of boosterism, which has until recently helped to shield ego-driven state politicians from reality.

* North Carolina was the only state in the region, and one of the few in the nation, to enact large and multiple tax increases since 2001. I suspect voters are angry about this, they are convinced that politicians in Raleigh can’t or won’t manage the state’s finances rationally, and they aren’t likely to listen to excuses given the fact that most of our neighboring states chose a different course.

* And then there’s scandal. Meg Scott Phipps. Frank Ballance. Gerald Hege. Charles Taylor. All have been accused, and one so far convicted, of serious ethical transgressions or even crimes. The risk incumbents run is having North Carolina voters come to the conclusion that all politicians are crooks and it’s time to swap out the entrenched crooks with some new crooks who will at least take a while to set up shop before they can rip us off.

Naturally, I’m being a bit cheeky about the “incumbency” tag. Because Democrats have controlled state government, formally or effectively, during this entire period, that party’s incumbents will likely face much more in the way of an adverse voter mood than GOP candidates will. But I do think that incumbents of all stripes will experience at least some significant turbulence.

Would you like to run for re-election on this kind of record? No, I wouldn’t, either.

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