NC Needs a Reality Check

If you check out Forbes Magazine’s List of the Best Places for Business and Careers, you will find a slideshow of silver skyscrapers hailing the prosperity of Raleigh and other North Carolina metro areas – but failing to show economic reality elsewhere in the Tar Heel State.

The magazine touts Raleigh as No. 2 in the nation; Durham is ranked 14th, Asheville 17th and Charlotte 18th. Four out of the top 25 beats every other state except Texas, which has five on the list. But do these rankings adequately reflect the overall economic situation of the state?

Despite Forbes’ continual glowing praise of these four cities, North Carolina ranked 48th nationally in unemployment in May at a rate of 9.4 percent, the worst in the South. The national average is 8.2 percent.

Meanwhile, Gov. Bev Perdue also insists on ignoring the facts and covering up the state’s harsh economic reality by persistently bragging about job growth in select areas. The Governor’s webpage would make you believe that every spurt of job creation in North Carolina in the past four years was of her own making. Some of the progress she claims is the responsibility of the One North Carolina Fund, a corporate welfare program largely controlled by the Governor, and instituted by the General Assembly in 2001 when the Democrats were still in control.

You mustn’t be fooled by flattering magazine articles or Governor Perdue’s boasts. According to a previous Civitas Review Online article on the issue, many of the jobs she touts have not materialized. They are mere promissory notes by big corporations who are maneuvering to get their hands on taxpayer dollars. The money for the One N.C. Fund is taken from the public and doled out to big business. These funds would be better entrusted to consumers, rather than politicians. With scarce resources, it is imperative that people invest in businesses that provide goods and services that people actually demand, not that Governor Perdue wants just so she can abdicate the throne of “worst governor in the country.”

The latest One N.C. Fund handout goes to United Technologies, which wants to buy the Goodrich Corp., an aerospace technology manufacturer in Charlotte. The fund would give $2.5 million to a company that already has $6 billion in the bank. Meanwhile, rural counties of North Carolina are suffering from these redistributions of wealth. Counties such as Rutherford, Graham, and Scotland are faced with unemployment rates between 13 and 17 percent, while the jobless rate in Mecklenburg hovers at 9.6 percent, The rates in Wake, Durham, and Buncombe (the other counties with cities on Forbes’ list) have all dropped below 8 percent.

A recent News & Observer story would have you think that the disparity is the fault of the Republican GOP and not bad business practices that have been plaguing the state for decades before the Republicans gained control of the legislature. So Governor Perdue takes credit for growth that she did not create, and conservatives get blamed for economic hardships that they did not manufacture. But these political games should not be taken at face value.

To be sure, the reforms that conservatives have implemented need time to take effect. Also, a proposed elimination of the personal income tax in upcoming tax reform plans would help remedy the situation. Finally, other conservative policies, such as the right-to-work law, boost the whole state’s economy.

Overall, corporate welfare schemes like the One N.C. Fund may very well aid our larger cities and make them attractive to rich investors, but they take money away from hard-working North Carolinians from other parts of the state. The fact is, corporate welfare has done more harm than good, and Governor Perdue and supporters of such schemes need a reality check: They shouldn’t be bragging about how efficient North Carolina has been at taking money from taxpayers in rural areas and giving it to big-city businesses.

Rhett Forman is an intern with the Civitas Institute.

This article was posted in Economy by Rhett Forman on July 16, 2012 at 10:34 AM.

© 2011 The Civitas Institute. Visit us on the web at www.nccivitas.org.
This article can be found at http://www.nccivitas.org/2012/nc-needs-a-reality-check/

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