RALEIGH – Get ready for some pretty ugly politics in 2009.
I know that’s not the current vibe, given the historic transfers of power about to commence. But in the midst of economic recession, politicians at every level of government are facing some difficult decisions. Each choice will bring political reaction and peril. Elected officials know it. Tensions will be high, and some of the resulting interactions are going to be rough.
Look what happened earlier this month in Guilford County. In a series of events now being called “the coup,” a bipartisan majority of the county commission elected Democrat Skip Alston as chairman and Republican Steve Arnold, himself a former chairman, as vice chairman. Alston previously chaired the state NAACP, while Arnold represented the High Point area in the North Carolina House, so these two strong political personalities are well-known outside their home county.
Shortly after the rise of the dynamic duo, Guilford’s county manager, deputy manager, and county attorney all made their exits. Alston explained that as the commission sought to balance its $586 million budget without another round of punitive tax increases, a majority concluded that the current county staff lacked a sufficient “desire to bring about efficiency and accountability.” Other county staffers are filling the top jobs on an interim basis.
Anyone possessing more than a passing familiarity with Guilford County politics have come to expect theatrics and odd alliances. But I think there’s something else going on here. Approaching the problem from both sides of the political spectrum, Alston and Arnold have come to the conclusion that fiscal politics as usual – meaning expansive government when times are good and tax increases to finance it when times are bad – won’t cut it this time.
The recession is too serious. A worldwide phenomenon caused primarily by a worldwide monetary inflation, it unlikely to be a temporary blip. The jobless rate may soar to 9 percent or higher later in the year. Manufacturers are cutting back shifts and hours. Retailers got creamed during the holiday shopping season. Policy miscues by the hapless Bush administration have queered investor confidence. Additional fiscal recklessness by the incoming Obama administration will only prolong the uncertainty, complicating business planning and scaring investors into safe, low-yielding securities.
All this means that the mechanisms North Carolina politicians have used during past downturns to balance their budgets, such as jacking up sales and excise taxes or raiding trust funds, will fall far short of an adequate solution. Contrary to the nonsense economics of the Keynesians, government can’t spare us the pain of recession by spending money that it doesn’t really have on programs that we can’t really afford.
Rather than obeying arcane and counterintuitive rules that conveniently increase the power of political elites over the rest of us, governments are actually subject to the same basic principles that households and businesses should follow. When revenues fall short of spending expectations, the latter must be adjusted downward to a more realistic level. When times are tough, governments need to become leaner, more focused, and more effective at fulfilling their basic responsibilities: to ensure law and order, protect individual rights, and perform a few true public goods that cannot practically be accomplished through purely voluntary means.
In Guilford County, Skip Alston and Steve Arnold are taking on the challenge. They won’t be the last.
Hood is president of the John Locke Foundation