I was listening to the television as I was working today and a commercial came on advertising how Toyota built a factory in Mississippi employing American workers manufacturing sophisticated consumer products. That would be cars.
It hit me that everyone in Washington D.C. is struggling to identify how we create family wage jobs in American today and the model that worked successfully in Mississippi was the one we all should be studying.
I don’t know all the particulars about how that factory was located where it was, but I would speculate that it had to do with a favorable regulatory climate in Mississippi coupled with a favorable tax environment. Who woulda thought? What did Mississippi offer to get Toyota to build their plant there?
Still speculating, I suspect that Toyota was looking for a community that would appreciate the investment they were making and the jobs they were creating and not view the company as either an enemy or exploiter but maybe as a partner.
Successful businesses recognize the importance of worker satisfaction within the company. Putting people to work in states that have suffered from long term under-employment can make a company somewhat popular.
I suspect that those workers in that plant in Mississippi appreciate the opportunity for long term prosperity that came to their town when Toyota could have gone almost anywhere else; but I bet it was the prosperity for their families they appreciate the most.
In addition, I suspect it will be cheaper for Toyota to operate a factory in Mississippi rather than Michigan or California for a variety of reasons? Wouldn’t that be a Win/Win?
The amazing thing about this example of a Toyota plant in Mississippi is that if our priority for government is to create jobs and put Americans back to work, all we have to do is create a friendlier regulatory environment and start viewing job creators as allies rather than adversaries. Instead of government listing all the requirements a company will have to comply with talk about how we can overcome the obstacles together to save time and money and get Americans working faster.
Boeing chose North Charleston, South Carolina to build the second assembly line for the Dreamliner because government in that state and county recognized the valuable partnership Boeing was offering to the region. Will it be cheaper for Boeing to build airplanes in South Carolina than in Washington State; probably.
Who can remember when the Seattle Super Sonics were playing in the Seattle Center rather than Oklahoma City? Team owners tried to make a deal that could keep the team in Seattle but the city council didn’t view the team as a valuable enough economic asset to put aside their personal views and keep the team in town. Now when investors talk about bringing a team back to the Puget Sound region, Seattle gets upset when Bellevue or Renton are suggested as being friendlier hosts. There is no doubt that Oklahoma City saw value where Seattle didn’t until the team was gone, then it was too late.
That old adage that it takes five times the effort to win a new customer as it does to keep an old one would suggest that we need to take a good hard look at why companies with good jobs are choosing Oklahoma, South Carolina, Mississippi, Nevada and Texas rather than Western Washington.
I’m not saying that there won’t be challenges, but if the goal is to create jobs that pay family wages then we need to focus on ways to make our community more attractive by stripping away some of the regulatory burden so companies like Boeing or Toyota will view us more favorably.
The key will be to stay focused on family wage jobs and the prosperity they bring to the community rather than fixating on a successful business ripe for the plucking.
No Loss for Words 
Only in Government is Cutting Spending Increasing Spending
by Steve DanaIn the course of the lengthy discussion regarding the national debt and deficits I couldn’t help but wonder if we all understood the accepted definitions of terms. In so many cases the same terms were used in different contexts.
For example; the term “budget cuts”? For you and me, a cut to my budget is spending less in the next cycle than I did in the current cycle. For the government cutting the budget is not spending less, it’s cutting the rate of growth of government spending. You and I would spend less, they would spend more, but supposedly decrease the year over year rate of growth. Where did they learn their math?
How about “tax reform”? Is “tax reform” raising rates or changing structure? Republicans tried to focus on cutting spending to reduce current deficits while Democrats wanted to incorporate “tax reform” into the debate to achieve the desired outcome. They seem to think that if a guy can afford a jet he isn’t paying enough tax. According to Democrats, balancing the budget must include both cuts in spending and tax reform. I could go along with that if “reform” meant addressing the tax code in total rather than just raising the rates higher on the folks who are already paying the lion’s share of the taxes already.
In a perverted way, I’ve been amused about the characterization by the “left” that the country is being screwed by the nation’s high earners because they aren’t paying their fair share of taxes; yet according to the Congressional Budget Office 51% of Americans pay no Federal Income Taxes at all. That is Zero Federal Income Tax paid by 51% of Americans but according to the Democrats in Congress, they’re over taxed.
While the top 5% of American earners pay 40% of the Federal Income Tax collected and the top 15% of American earners pay 75% of the Federal Income Tax but according to Democrats in Congress they aren’t paying their fair share. What am I missing? One side pays no tax but is over taxed and the other side pays all the tax but is not paying their fair share.
I think most Americans agree the Tax Code is too complex to be fair. And “fair” is variable that moves back and forth depending on your personal interests. I suspect that if we were given a choice of keeping the current federal income tax system or dumping it all for a flat tax of maybe 8%, most Americans would opt for a flat tax that treats everyone the same. If you earn $100,000 you pay $8,000; if you earn a million bucks you would pay $80,000 and if you earned $25,000 you would pay $2,000. Everyone would pay based upon what they earned (at the same rate). Everyone pays the same rate but based upon their earnings they pay more or less. That sounds like tax reform.
And finally, this agreement between the parties regarding raising the debt limit; the Democrats didn’t get tax increases, but the Republicans didn’t get any meaningful cuts and the President got an agreement to increase the national debt by 20% over the next 18 months. That is another increase of the debt from $14.2 Trillion to $16.4 trillion by election day in 2012. Then factor in the 12 person committee that will either cut a trillion or so in government spending or cut the Defense budget by another $800 Billion. How could Republicans view any of this as a victory? As far as I can tell, this was another huge giveaway to the Democrats. I am baffled how we let this happen.
Posted in Federal Government, Public Budgets | 3 Comments »