Race to the bottom

by | Sep 29, 2013 | Economic Development, Economy, Editor's Blog, Tax Reform | 7 comments

John Hood recently wrote that liberals dismiss Republican’s tax cuts and deregulation as economic tools because they don’t believe in the relationship between taxes, regulation and economic development. There may be an element of truth to what he argues but he misses the larger point. While high tax rates and over-regulation may have a negative impact on economic development, that’s not the problem we have in North Carolina. And cutting taxes and regulations, and hence, services, oversight and education, to compete with our Southern neighbors at the bottom of the economic ladder is not the answer we need.

We have two North Carolinas–an urban one and a rural one. Our urban/suburban state is anchored along the I-85/I-40 corridor that stretches from the Research Triangle Park to Charlotte. We have a couple of secondary urban areas like Asheville and Wilmington. While everywhere got hit hard by the recession, RTP, The Triad and Charlotte will do just fine, especially as the financial sector recovers. Asheville and Wilmington are also getting back up.

The problem in our state is our rural sector. Many of the areas have been in a depression for over a decade. The demise of tobacco killed agriculture in eastern North Carolina and the free-marketeers gave our manufacturing jobs to China, Mexico and other countries that could provide lower taxes, lower wages and fewer worker and environmental protections. For these areas, the recession was just another hammer blow to an already reeling economy.

While there are no easy answers to the problems facing rural NC, there are certainly some bad ones. And that’s what the Republicans are trying. They’ve decided that the way to attract jobs is to make us one of those low-wage, low-tax, low-regulation states that took our jobs in the first place. As they keep saying, they want us to look more like Tennessee, South Carolina, Georgia and Alabama.

On almost every measure of quality of life issues, those states consistently fall below North Carolina. Their public schools lag far behind ours. Their public university systems aren’t even in the same league. Their life expectancy is lower and their infant mortality rates are higher. A larger portion of their citizens live in poverty. Finally, our median and per capita incomes rates are higher. By almost every measure, North Carolina is a better place to live and raise a family. So why would we want to be more like those other states?

North Carolina’s decades long commitment to education and, to a lesser degree, public health have made the difference. Our neighbors focused more on lower taxes and less regulations and have paid more in incentives to lure companies. Those are certainly economic development strategies–if we want to look more like the Third World. But why would we want to join a race to the bottom?


  1. NCBlue

    Until somehow gerrymandering is ended none of this matters. The Democrats could outvote the Republicans at a 2-1 clip and still not win control of either house or senate.

  2. ncmathsadist

    A great deal of blame for this resides with a Democratic party in NC that had a smug culture of cronyism, corruption, and influence peddling. The NC Democratic party needs a high colonic to purge it of its colonic burden of chummy corruption. The Dems need to get going. Happily for them, McCrony appears to be at least as big a pig as the Jim Black and his blackguardly claque. What a cesspool!

    • Thomas Mills

      You are correct. Democrats didn’t address the issue when they had a chance. Now is the time to redeem themselves.

  3. J.Maki

    It is not true that liberals don’t see the connection between taxes, regulations, et all. We see. Read Bulls, Bears and Ballot Boxes. What is going on is the final step when the American voters have ceded their votes and attitudes to the my vote doesn’t count or I can’t do anything about it league.It is to the point that in given districts in this state 10-20 show up to votes if you average across total voting opportunities. The Republicans have overwhelmed our state with a deluge of nonsensical changes to push the Tea Party platform. God help them because they will have to answer.Where are all the quiet people who, in the past, would have come up with plans to stop this bunch?

  4. Michael

    I live in Tennessee, and I will accept some of your criticism of my state; however, North Carolina’s race to the bottom is on a much higher plane of stupid than we have here in the Volunteer State. Your state legislators are clowns of the worst order, and, as I recall, it was your citizens who voted them in. No one to blame but yourselves.

    • Thomas Mills

      Point taken. My brother lives in western Tennessee, though, and he told me he thought Tennessee had the most ridiculous legislators until this bunch in NC came along.

    • Dr Venture

      The Republicans won in NC largely to the magic of gerrymandering.

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