Loading...
BYH to the one saying that Democrats don't believe in America's borders. Where do they get this stuff? I've never heard...

Low taxes, less regulation encourage new enterprises

john hood.jpg

John Hood

Loading…

Monday, September 10, 2018

North Carolina’s economy is in reasonably good shape. Over the past five years of available data, our state’s employers have added 480,000 net new jobs, with our job-creation rate exceeding the national and Southeastern averages. North Carolina’s average income per person has gone up faster than the national and regional averages, as well, while our growth in gross domestic product has, after adjusting for inflation, beaten the regional average and matched the national one.

That doesn’t mean every North Carolinian who wants a full-time job can find one. It doesn’t mean all North Carolinians have equal access to economic opportunities. Perfection is impossible in any human endeavor, of course. But even if we confine our expectations to the realm of the possible, it is certainly possible for North Carolina’s economy to be healthier than it is.

More to the point, our economy would be better off if more people were starting more new enterprises in North Carolina — and growing them rapidly. Among the 25 largest states in the country, we rank a pretty good ninth in startup activity but only 18th in entrepreneurial growth, a measure from the Kauffman Foundation that assesses how much and how quickly new companies expand.

Conservatives think the answer to economic progress and fostering entrepreneurship lies in continuing to lower the cost of doing business in our state while increasing the real-world return on the dollars North Carolinians already spend on schools, highways, public safety and other government functions.

Progressives think the conservatives’ focus on cost is misguided — that if policymakers raised taxes or increased regulatory costs to deliver higher-quality services or better production of public health and safety, North Carolina’s economy would grow faster and offer more opportunities to more people.

I think the conservatives have the better argument. It has more research support from peer-reviewed studies that explore which factors most influence state and local economic growth. The most important factors, frankly, don’t have much to do with politics. Geography is immensely important. So are technological and organizational changes within private industry.

Most peer-reviewed studies published on the subject since 1990 found a negative association between the cost of government and economic growth, although sometimes the effect was modest. Meanwhile, most studies found no link between growth and government expenditure, including education and infrastructure spending.

So, to the extent North Carolina politicians can shape our state’s economic growth over time at all, they should primarily employ the tools of fiscal conservatism, not fiscal progressivism. Keep taxes and annual spending growth under control. Weed North Carolina’s regulatory garden, keeping the rules that confer more social benefits than costs while pulling out, not just trimming back, the others.

What about government programs that offer technical assistance or even direct incentives to businesses? Whatever you think of their effect on business recruitment, these policies are poorly suited to the task of fostering business starts. In a new paper published in the Journal of Entrepreneurship and Public Policy, Southern Methodist University scholars Meg Patrick Tuszynski and Dean Stansel found that “economic development incentive programs are unlikely to increase entrepreneurial activity and may decrease it.”

One of the variables Tuszynski and Stansel used in their study did exhibit a statistically significant relationship with entrepreneurship: economic freedom. New businesses were more likely to form, and new patents issued, in states with smaller budgets, lower taxes, and less burdensome regulations.

I am well aware of the fact that, despite what I consider to be compelling research findings and theoretical explanations, you may still doubt the ability of conservative policies to promote entrepreneurship and thus expand economic growth and opportunity. But perhaps you better understand why millions of your fellow North Carolinians think otherwise.

John Hood is chairman of the John Locke Foundation based in Raleigh.

From Today
Dec. 14 Community News

TO­DAY

Blood do­na­tion cen­ter

The Eastern North Carolina Dona­tion Cen­ter, 700 Cromwell Drive, will be open 6:30 a.m. to 2:30 p.m. to­day through Sun­day and from 11 a.m. to 7 p.m. on Mon­day. Blood donors are needed. Walk-ins wel­come;…

Loading…

Humans of Greenville

@HumansofGville

Local photographer Joe Pellegrino explores Greenville to create a photographic census of its people.

Op Ed

December 14, 2018

Every time conventional Beltway wisdom congeals as quickly as it did on Tuesday — this time around, the certainty that President Donald Trump had blundered terribly in saying he would in effect "own" any government shutdown over border security funding — analysts ought to think back to…

HughHewitt

December 14, 2018

This just in: Black men are still being killed by police officers for no good reason.

But you knew that. Anyone who has remotely been paying attention should be aware that unjustified police killings of African-American men continue unabated. In far too many police departments, the unwritten rule…

Eugene Robinson

December 13, 2018

In the January 1953 edition of the magazine If: Worlds of Science Fiction, a fan of the genre from Texas, Marilyn Venable, made her debut as an author. “Time Enough at Last,” Venable’s story of a bookish man who survives a nuclear holocaust, made such an impression that Twilight…

john hood.jpg

December 13, 2018

Prosecutors investigating President Trump made big news recently, but it wasn't about Russia. Rather, in their sentencing recommendation for fixer Michael Cohen, lawyers with the U.S. Attorney's Office for the Southern District of New York wrote that in the final weeks of the 2016 campaign,…

Byron York

December 12, 2018

 

How appropriate would it be for a major publicly held American company to hire a person with a history of having publicly made the following statements and many others like them? (In the interest of brevity, I shall list only four.)

"The world could get by just fine with zero black people."…

Walter Williams

December 12, 2018

When I heard the news of the arrest in Canada of Wanzhou Meng, Huawei's chief financial officer, my thoughts turned to Al Capone.

Capone was targeted for running Chicago's underworld but was ultimately brought down for tax evasion. Canadian authorities detained Meng on what appears to be Huawei's…

LAKE

December 11, 2018

Here we are, two years later.

We've taken many, arduous, often tedious steps, only to return to where we began, having gone nowhere.

In late 2016, as Gov. Roy Cooper was preparing to take office, the General Assembly decided it would change the makeup of the Bipartisan Board of Elections and Ethics…

John Trump

December 11, 2018

Have the Republicans running the legislature gone soft?

Their lame-duck session has been lacking the fireworks I'd expected in the last hurrah of veto-proof GOP rule. The main agenda item was voter ID. And with a newly inked constitutional amendment to back it up, I fully expected Republicans to…

Colin Campbell

December 10, 2018

How should we respond to the urban-rural divide? The question has legions of politicians, scholars, journalists, and businesses scrambling for answers.

I respect their efforts. But I feel compelled to point out, respectfully, that the question is poorly conceived. Most people live in neither truly…

john hood.jpg

December 10, 2018

Orange County, California, Register

For too long, Congress has abdicated its constitutional obligations with respect to war powers.

On Nov. 28, the Senate took an important step toward reasserting this authority by voting 63 to 37 in favor of moving ahead on a resolution directing the removal of US…

324 stories in Op Ed. Viewing 1 through 10.
«First Page   «Previous Page        
Page 1 of 33
        Next Page»   Last Page»