The Bull in Full

Dell Closes Winston-Salem Factory, after less than 5 years, over $300 million in incentives

Boy, I wish I could act surprised at this one.  After intense public criticism of the $305 million in incentives, between tax breaks, worker retraining, and flat cash grants to the massive computer maker, a scant five years later Dell is pulling up the stakes and decamping.

For the reading class on urban development I'm taking right now, I'm reading a fair bit of radical geographer David Harvey, but the one which comes to mind is his description and critique of the "entrepreneurial state," a mode of governance that started to come into vogue in the 1970s and has been growing ever since.  (FWIW, "state" here refers to governmental entities in general, not US states specifically.)  Rather than the previous New Deal model of the "caretaker" state, Harvey illustrates how state entities have reached the point of absurdity in some of these deals with the private sector.  In the literature I'm reading, most geographers chalk this up to the school of thought of "neoliberalism," running from Hayek through Goldwater and Thatcher and Reagan and Giuliani and so forth.  As irony would have it, though, some of the most vocal critics of these policies (at least in Durham) run in libertarian circles that venerate Hayek more than just about anyone.  So, now we've got both the radical Leftist geographers like Harvey criticizing this, and Hayek's true heirs criticizing it too.  What gives?  If two such divergent political schools loathe them so much, why do we do them in the first place?

The answer, of course, is that you're damned if you do, damned if you don't in a lot of these cases.  In the case of Dell, North Carolina was in the middle of the collapse of two of its most important, longest lasting, most durable industries: textiles and furniture.  With the job losses mounting up, the reigning coalition of pro-business Democrats felt they had to do something, both out of political expediency and, I'll give the benefit of the doubt, out of no small concern for the good of North Carolina.

But now whatever money got paid out is up in smoke.  (I should point out that I don't know how much of the incentives actually got paid out -- these deals usually have rider clauses on them that certain conditions have to be met over time.)  And what is North Carolina left with?  An empty shell of a factory and over a thousand folks who will have lost their jobs by early next year.

Again, I must point out the simple ease of the armchair critic.  Harvey and his cohorts generally advocate something along the lines of old school egalitarian liberalism, from FDR-style employment programs to Great Society poverty amelioration programs.  I certainly sympathize with this perspective, given my liberal upbringing, but even if I were to try to ignore the numerous failings of Left liberalism, politically it's quite apparent that the pure forms of mid-20th century liberalism are dead for good.  On the other hand, the libertarian critique that what we really need is to get the government out of the economy in every way, shape, and form frustrates me even more.  Look, I bristle at the amount we spend on highways these days, but it's impossible to look at any history or historical geography of North Carolina and not notice the dramatic improvements to the lives of its citizens that the investments in roads brought about.

So where does that leave us?  An interesting website on North Carolina in the Global Economy over at Duke, which pretty evidently comes out of much more mainline economics and public policy analysis than my Harvey readings, puts forth a number of recommendations on doing this kind of economic recruitment better.  Without endorsing the whole thing, it's an interesting read, and I certainly agree with a few points here.  First of all, worker training is a good idea, but not just for massive corporations like Dell.  There should be a standing offer for any business that's willing to pay half the price of work-related training for some small minimum number of its employees that some combination of the city, county, and state governments will cover the other half at a Technical school of some sort.  This not only makes the city more attractive to the big guys, but also helps workers who are already here and already have jobs, and helps businesses across the board without playing favorites. 

Second of all, and this is my personal hobby-horse, but instead of giving tax credits (which, as the Duke site points out, are only worth anything after you make a profit) or direct cash grants, I'd much rather see states put money into targeted infrastructure.  Look, if the Dell project had worked out, it would have been a big help to Winston-Salem's economy, and I can see that it would have been worth a shot.  But since it failed, North Carolina is left with nothing to show for its money.  Instead of giving out $300 million in grants and incentives, what if we'd spent $500 million in transportation and energy improvements in Winston-Salem to make it easier to get raw materials in, easier to ship built systems out, and cheaper, more sustainable energy to supply the factory?  What if Dell had an upgraded rail bed from W-S all the way to our fancy new shipping terminals at the coast?  All of these would have benefited the Dell facility, and made it more competitive over the long run had the project worked out.  But now that Dell's gone, if we had spent our money on infrastructure, rather than a bunch of broken dreams, there'd be a big shell with upgraded infrastructure sitting there waiting for whatever industry drove the next big economic expansion.

I find the notion that economic activity ever happens without at least some meaningful government-funded structures misguided and naive.  However, the Dell deal should be a cautionary tale in the long and sordid saga of economic incentives.  And if there's one lesson I wish we'd learn, it'd be this: don't ever just hand out cash, either in the form of tax breaks or grants.  Instead, do the things that government does well, like building infrastructure and educating the citizens.

The Slow and Subtle Rot* of Tony Rand: Part I

The making of law in North Carolina is an insider game, full of murky corners and byzantine turns to the point that only the obsessive manage to keep track of it all.  While in name all of our representatives wield power in the General Assembly, in reality an enormous amount of the ultimate decision making lies in the hands of a very small number of individuals.  In the state Senate, for instance, Marc Basnight of Manteo has held sway over the body for over 15 years, and has enormous sway over which bills come to the floor and which don't.  While having this much power concentrated in a single individual may be dangerous, to my eyes, Basnight's decisions are on the whole more good than bad.  The second in command in the Senate, however, goes by a name that oddly seems to appear just about every time a worthwhile bill I support dies on procedural maneuvering, an under-the-table slop bucket gets passed to the UNC system (specifically Chapel Hill), or, as is the case today, a particularly odious budget suddenly slams out of the Senate.  That name is Tony Rand, Majority Leader of the Senate.

His influence, however, is subtle enough that it rarely makes the news and is hard to nail down when trying to describe it to others.  There's no smoking gun to pin on him that doesn't involve getting into bureaucratic bilgewater to some extent.  Frankly, though, I'm getting sick of his nonsense, so here's an attempt to start taking note every time Rand shivs a bill, takes writing another into secret conference, or slips questionable powers to some agency in the dark of night.

Our first installment comes from the invaluable NC Policy Watch:

The Senate gave final approval to its version of the state budget Thursday, though even if you happened to be at the Legislative Building in Raleigh, you would have almost certainly missed it.  The Senator who represents you had no opportunity to say anything at all about how the state should address a $4 billion shortfall and balance the budget, much less offer any amendments to protect human services or spare public schools from damaging cuts.

The Senate leadership made sure of that Wednesday when Majority Leader Tony Rand invoked a parliamentary maneuver to end discussion after budget writers described the plan's highlights, a few Republicans complained, and a few amendments were buried.

Under the Senate rules, ending the debate on Wednesday also ended it Thursday before it could begin.

There wasn't much discussion of the amendments either. Rand moved to table each one not long after they were explained and several of his Democratic colleagues enthusiastically vied to second his motion.

If you are tempted to brush all this off as a boring legislative procedure, resist the urge. The process is not only undemocratic and offensive, it is a symbol of the worst of the legislative culture.

For further reading on Tony Rand, while I don't have links handy, other interesting instances are: Rand killing a bill from Mickey Micheaux to give more magistrates and court staff to Durham County's horribly clogged and understaffed judicial system; Rand getting a bill to give all recipients of athletic scholarships at UNC and NCSU (and no other schools) in-state tuition; Rand giving UNC eminent domain power in all of Orange County for the purposes of building another airport.  More to come, I have no doubt.

* I want to note that I spent a good while with the thesaurus trying to come up with the right word here.  "Corruption" is a tad too strong for Rand, and I worry that "rot" is too.  Rand is bad for North Carolina, capricious in his decision making, and infuriating in his politics, but I have no evidence that he takes kick-backs or bribes.  (At least, no more than the standard campaign contribution racket.)

If you want mass transit in the Triangle, call Hagan and Burr now

I'd love to write more about this, but time is short, and the time to act is now.

The stimulus package moving its way through Washington is, to be fair, a bit of an ugly monster.  However, there's a lot of good programs in it, many of which are unfortunately the ones that are on the chopping block right now.  Energy efficiency upgrades for government buildings, which one would think would fall into the duh-obvious category for good stimulus, are among those at risk of cuts.  However, what's worse is mass transit funding is at risk too, while both Houses of Congress seem intent on stuffing more and more highway funding into it.

I hate to say I told you so, but a year ago when Bush's stimulus bill was making it's way through Congress, I spilled a bunch of electronic ink on this subject.  Sadly, in one of those, "damn, I wish I'd been wrong" moments, sure enough, huge amounts of new tax breaks did absolutely nothing to stimulate the economy, and just set the stage for the economic collapse of 2008.  With massive government funds getting shipped overseas, the public treasury turned upside down by Bush's tax cuts, and major backlogs in infrastructure left wanting by the crony capitalism of the previous administration, it was no surprise that simply dumping more tax cuts into the economy was about as effective as pushing on a string.

What we needed then, just as now, was infrastructure investment as stimulus.  Early on in the process, it sounded like what this was what the stimulus bill was going to be about.  However, the rotting corpse of the Reagan/Goldwater orthodoxy (which Reagan himself might have even blanched at today) brought out the bellicose GOP and the nervous Nellies from the Democrats, and of course we had to have some largely useless tax cuts in the bill. 

Regardless, while there is a fair amount of infrastructure spending in the bill, what those in Washington seem to be failing at realizing is that, as per Shellenberger and Nordhaus, this is exactly the time we need to be thinking about how to restructure our economy to be less dependent on fossil fuels and more ready to make cuts in our carbon emissions.  Government spending has an enormous effect on shaping the economy, and despite the stammerings from policy mouthpieces of the Right's political machine, nobody in the GOP is doing anything to lessen that impact.  Massive federal spending on highways simply continues to push our economy towards a single passenger vehicle-focused transportation system, when either the absence of federal spending, or less disastrously, greater balance in transportation dollars, would allow for a correction towards less polluting forms of transportation.

The bill from the House originally had $30 billion in road projects and just $10 billion for all mass transit and rail projects.  Thankfully Rep. Oberstar from Minnesota lead a revolt that got a little over $3 billion added in funding.  It's hard to keep everything straight in the swirl of information coming out of Capitol Hill today, but it sounds like the GOP is trying to strip out some of that mass transit funding as part of the "centrist" compromise.  From the reports of the STAC committe, to complete the biggest transit dreams of the Triangle, including passenger rail improvements, local bus expansion, para-transit, and some form of regional rail, whether heavy or light, we'd need about $1 billion in federal dollars to match a combined $1 billion from state and local sources.  (I'll also note that for most highway projects, the Feds pay about %80 of the tab -- yet another way in which highway funding is ridiculously skewed and unproductive.)  Given that we have at least 3/4 complete plans sitting around right now, we'd very likely be excellent candidates to receive this money, which would not only provide jobs in planning and construction of the system, but would likely trigger a building boom near the planned stations, we've got a vested interest in keeping that money in the bill.  But if the hand-wringers among the Democrats and the pro-highway wing of the GOP (including our friends at the John Locke Foundation) get their way, what chance do you think that money has in coming out in the next few years.

An excellent diary at Daily Kos made a fantastic point.  Obama's best campaign slogan, by my lights, was, "We are the ones we've been waiting for," with a close second being, "I'm not asking you to believe in my power to change government, I'm asking you to believe in yours."  If you want transit in the Triangle, now is the time to call.  Here are the office numbers.  The lines are understandably a bit busy, so keep trying:

Kay Hagan
202-224-6342

Richard Burr
202-224-3154

Because rail and transit are STILL stimulus where we need it.

An Open Letter to Senator-elect Kay Hagan

Dear Senator-Elect Hagan,  (That's a fantastic opening to be able to write!)

While I realize you haven't yet even had a chance to get assigned an office on Capitol Hill, there's one question which you'll likely be faced with even before you take the oath of office, and that's the question of what to do about Senator Lieberman and his chairmanship of the Homeland Security and Government Affairs committee. 

I realize that the internal politics of the US Senate are complex and tricky, but two factors stand out.  The first, and most obvious, is not just that the Senator campaigned against President-elect Obama, but did so in particularly nasty ways.  He spoke at the Republican National Convention, repeatedly campaigned with Senator McCain, and openly and hostilely questioned President-elect Obama's patriotism, intelligence, and preparedness to be President, calling him "dangerously naive" at one point.  It's one thing to support the other party's nominee, which certainly has precedent in the Senate.  It's quite another to do so in such a quarrelsome and mud-slinging manner, particularly for someone such as Senator Lieberman, who claims to be above such ugliness.

Secondly, and more importantly, however, Senator Lieberman utterly failed to fulfill the duties of the chairmanship.  In his role, it was uniquely his responsibility to investigate the failure of the response to Katrina, the rampant corruption and waste in homeland security contracts, and many other issues that Chairman Henry Waxman, Mr. Lieberman's House counterpart, went after aggressively.  Mr. Lieberman declined to do any investigating of the catastrophic Bush administration from his highly important seat atop one of the most important oversight committees in the Senate. 

There is precedent for this.  When Democratic senators endorsed Barry Goldwater in 1964, they lost their committee seniority, including chairmanships where applicable.  If Mr. Lieberman chooses to caucus with the Democrats, I see no reason to force him out.  However, elections have consequences, as do our actions during them.  Given that Senator Lieberman has in almost all ways left the Democratic party behind, I ask that you support action in the Senate to deny him another term as chair of the Homeland Security and Government Affairs committee.

This is not about retribution.  This is about following standard Senate practice and ensuring competence at the Chairs of the Senate's most important committees.

Respectfully yours,
Michael Bacon
Durham, NC

Sure, we'll take those roads, for a nominal fee..

I'm just catching up on reading some newspaper articles (my Herald-Sun subscription, which I suspended to go on vacation, appears to have never come back), and noticed today's Gronberg article in which the "21st Century Transportation Committee," which reports to the NC General Assembly, recommends that North Carolina's cities take on a greater share of the funding of the state-owned roads in their jurisdiction. Specifically, the GA wants to transfer those roads that don't constitute part of a state, US highway, or Interstate road.

Now, predictably, this didn't go over too well with numerous representatives of local cities, including our own Tom Bonfield. The state would essentially be dumping the responsibility for maintenance on the municipalities, nicely taking that particularly large line item off the state budget. And as a general Durham booster, I have of course a predictable take on this:

I agree completely with the state. Well, that is, with a catch.

How I'm Voting -- May 6 edition

Call these endorsements or not -- whatever.  Enough people have asked me to post these over the past few elections that I feel like doing one here.  I do my best to be clear with just how much knowledge (or lack thereof) about the candidates I'm basing my decisions on, so I don't give any false impression of expertise.  Anyway, enough primary blather to choke a horse awaits just below the fold....

(I've put whom I'm voting for in bold, for perhaps easier reading.)

State of Confusion

At work, running low on sleep, and not having blogged in a while, this post at Barry's got me thinking:

By the way, Wichita KS is in Sedgewick County, not Wichita County, which can be confusing, at the least.

For all the talk about merging city and county governments here (which I continue to think is a ridiculous idea -- hopefully more on that soon in my primary election post), one reason it actually could work is that the city of Durham, NC is actually in Durham County, NC.  Oddly enough, this seems to be the exception rather than the rule in NC.  This is an attempt to come up with all of the oddly mismatched city/county names in the state.  I'm sure I'm going to miss an awful lot. 

I've listed the cities and the counties they're in, along with the counties and their county seats.

Asheville -- Buncombe County
Asheboro -- Randolph County
Ashe County -- Jefferson

Alexander -- Buncombe County
Alexander County -- Taylorsville

Graham -- Alamance County
Graham County -- Robbinsville

Greensboro -- Guilford County
Greenville -- Pitt County
Greene County -- Snow Hill
Pittsboro -- Chatham County

Beaufort -- Carteret County
Beaufort County -- Washington
Washington County -- Plymouth

Henderson, NC -- Vance County
Hendersonville, NC -- Henderson County

Franklin, NC -- Macon County
Franklin County -- Louisburg

Cherokee, NC -- Swain County
Cherokee County -- Murphy

Jacksonville, NC -- Onslow County
Jackson County -- Sylva

Waynesville, NC -- Haywood County
Wayne County -- Goldsboro

Yanceyville, NC -- Caswell County
Yancey County -- Burnsville

What have I missed?

Transit in the Triangle: Together, or apart?

To touch on a topic I keep trying to get to, it seems that the future of public transportation in the Triangle has come very quietly to a critical turning point.  It appears that most of what's going to be said in public has been said, and the talk made its way from the pages of the newspapers to the back rooms, where I can only speculate that haggling over the process seems to be still going on.  Given the amount of time and effort put into the STAC, I can't imagine that the process has already fallen dead.  At least I certainly hope not.

To recap, following the final collapse of the originally proposed Raleigh-to-Durham high frequency rail service, the state government appointed a Special Transit Advisory Commission (a.k.a, the STAC), to be hosted out of the Triangle J Council of Governments.  The purpose, ultimately, was to revisit every step in the decision-making process, to go back over all the options, and to see if out of the ashes of the original TTA plan, something could be made to work politically and financially.  It consists of all sorts of movers and shakers from across the Triangle, from business folks, former elected officials, university leaders, and activists.  The STAC met monthly for the past year or so, working with staff  members from the various local governments as well as the state.  In February, the STAC unveiled a draft report of its recommendations, which showed an ambitious $2 billion comprehensive plan for transit in the Triangle, to be funded through some sort of local tax, similar to Charlotte's .5% sales tax.  One of the Indy's blogs captured it nicely in a post last month, wherein the stresses in the agreement started to show.  Not surprisingly, the fault lines fell along much the same lines as before.  There's all sorts of ways to describe that rift, but ultimately it boils down to the Durham-Wake county line.

North Carolina actually gets a say

While I'm not looking forward to the Democratic nomination getting ugly, there's a bright side here.  In an election that everyone expected to be over in February, North Carolina's May primary will actually matter.  Between now and then, the only other large population state to vote is Pennsylvania.

Since North Carolina has been ignored in every presidential election since I was old enough to vote, and its primary has always been so late that the race was always decided by then, I'm pretty excited about this.  It's the first time I'll get a meaningful vote in a presidential election.

STAC releases transit plan

I've been sitting on the idea for a blog post for a couple of months now that I've never gotten a chance to write, because I never feel like I have the whole story.  But Bruce Siceloff at the N&O just broke the story of the Special Transportation Advisory Committee for Durham, Wake, and Orange counties releasing its recommendations for how to go forward with transit in the Triangle, and based on one article, it looks like a home run.

The original TTA plan centered around the plans and developments under the Clinton administration, under which cities around the country got seed money to plan new public transportation infrastructure, with the understanding that any reasonably good proposal would have a good shot at funding.  These funds emphasized getting the first lines built, which always cost the most, so that future lines could grow off of those.  Like in so many cases, however, the Bush administration had other ideas, and gutted funds for the plans, and made up for the loss by increasing the bar on the projected operating efficiency from day one.  That moved the bar from where TTA had been aiming to a level it couldn't reach, particularly with all sorts of idiotic nonsense from Norfolk-Southern and the North Carolina Railroad about right of way uses, as well as intransigence from senior officials at Duke wanting to protect the bucolic charm of the Erwin-Fulton intersection.  The result, of course, was that TTA had to give up on federal funds.

The new plan takes a much different tack.  It still looks for federal funds, but instead of counting on them for over 60% of the cost, the way TTA originally did, it calls for local funding sources, in the form of a half cent special sales tax increase and a $10 increase in the car registration fee (the latter of which is sure to make heads explode at the John Locke Foundation).  This would pay half the cost of a massive $2 billion plan, with the remainder coming in the form of 25% from the state and 25% from the feds. 

And for that matter, the plan looks much better to begin with.