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Keep young people here:
Fred Alexander, attending
on behalf of sponsor Duke
Energy, told the crowd that
his family’s experience had
taught him that “the better educated
your kids are, the
less likely they are to come
back home.”
“We need to do something
to allow them at least
the option of coming back
home,” he said.
EDC accomplishments:
EDC chairman Ed Shatley
gave a brief overview of
the commission, which was
established in 1984 and given
a new focus in 2008. As a result
of its reorganization, the
EDC is now meeting every
other month and serves as an
advisory group to the county
commissioners. In March
2009, James McCoy was
hired as a consultant, and in
June 2009, Trevor Dalton became
a full-time employee.
The EDC is focusing on four
core areas: Existing business
development, entrepreneurial
development, business recruitment
and retail development.
Since the reorganization,
the EDC has received 24 inquiries,
fielded 10 prospects
and now has six active projects,
Shatley said. It has held
135 stakeholder meetings, developed
marketing materials
and recommended incentive
guidelines, which were approved
by the commissioners.
It has also established an
entrepreneurial focus group,
called on eight site selection
firms, aided by AdvantageWest,
and visited one
corporate site.
State of the economy:
Roger Plemens, CEO of
Macon Bank, introduced the
keynote speaker, Harry
Davis, who also gave the
keynote at the bank’s annual
meeting last year.
Davis is the Professor of
Banking and Economist for
the North Carolina Bankers
Association. He is also professor
of Finance and past
Chair of the Department of
Finance, Banking and Insurance
at Appalachian State
University.
He presented the still
somewhat grim news about
the economy in an entertaining
and lucid style, aided by
PowerPoint slides. Among
the points he made were
these:
• The recession that started
in December 2007 is the
deepest since the 1930s, and
the 3.8 percent decline in
GDP is the largest since
1938.
• Consumer confidence is
up, but still below the levels
of 2001.
• We have witnessed the
largest drop in salaries and
wages in 60 years, and the
drop in interest and dividends
has been even worse.
• The stock market was
up at least 20 percent in 2009
and profits are up among the
S&P Companies. However,
they keep laying people off.
• Consumers are getting
out of debt. Household debt
fell 1.7 percent last year, but
debt levels are still near
record highs.
• The economy lost 8.4
million+ jobs during the recession.
The (U.S.) unemployment
rate in March was
9.7 percent, nearly double the
4.9 percent of January 2008.
• The country added
162,000 jobs in March — the
most since October 2007.
• The average unemployment
for the last 20 years is
5.6 percent. Economists say
it will take five years to get
back to that level.
• Labor mobility is falling
because people aren’t able to
move — they can’t sell their
homes.
• It takes longer after each
recession to get lost jobs
back. After the 1991 recession,
it took 23 months; after
2001, it took 39 months. This
time, economists think it will
take five years. “Debt is the
culprit,” Davis said.
• North Carolina had an
unemployment rate of 11.1
percent in March, the ninth
highest in the U.S. However,
the rate decreased in all 100
counties.
• Construction, manufacturing
and financial services
suffered big losses over the
last 12 months. The tourism
and hospitality industries lost
jobs in the last three or four
months.
• North Carolina has relatively
more manufacturing
jobs than most states, and that
is why the unemployment
rate is so high now. “The
whole state has suffered. It
will take a lot to turn it
around,” Davis said.
• North Carolina has one
of the highest in-migration
rates in the country, especially
in the western counties.
While still high, in-migration
rates are about half what they
were two years ago because
people in Florida and the
Northeast can’t sell their
houses. “That has cut in-migration
dramatically,” Davis
said.
• In March, new home
sales increased dramatically,
partly because of the tax
credit.“It will start to get better,”
Davis said. “But it will
be slow.”
Davis emphasized the impact
on the economy of government
spending and debt.
The U.S. government is
spending 25.4 percent of the
GDP, a post-WWII record.
“This is an unbelievable
level of spending and everyone
knows it,” Davis said.
This year, the deficit will
be $1.6 trillion, and the interest
on that debt is $209 billion.
For comparison, Davis
noted that the federal government
spends $157 billion
on education.
“In 10 years, we’ll be at
$900 billion in interest payments
per year, unless we do
something about it,” Davis
said.
What appears to be in the
works is VAT, a value-added
tax or national sales tax, to
tackle the revenue side.
“We’ll become Spain,”
Davis quipped.
He said that, of the $787
billion stimulus package,
“we’ve spent $350 billion so
far.” For example, Davis
said, the Department of Energy
got $37 billion and has
spent $2.1 billion. “The agencies
are paralyzed.”
Energy
“Our energy policy is
awful,” Davis said.
He reminded
the crowd that President
Carter had called for
“energy independence,” but
today, we are more dependent
on foreign oil than ever.
At the same time, we have
plenty of natural gas. He advised
converting all government
vehicles to run on natural
gas and raising the gas
tax to encourage people to
drive more efficient vehicles.
If gas is costly enough, wind
and solar will start making
sense, he said.
Slow recovery
The recovery is going to
be slow, Davis said, and
North Carolina employment
will grow more slowly than
the U.S.
He predicted that government
spending in the U.S.
will continue to be cut. The
next shoe to drop will be in
the public sector, he warned.
“We are starting to hear
about teachers, state and local
employees losing their jobs.”
The problem, as Davis
sees it, derives from the high
debt levels of the U.S. government
and of us as a people.
This region will struggle
because it has depended on
people moving in from the
Atlanta area and Florida.
“Atlanta is a waste land,”
Davis said. “Real estate developers
are bringing down
the banks. Georgia has more
foreclosures than anyone but
California. It’s the same in
Florida — terrible overgrowth.
People can’t get out.”
If they can’t get out, they
can’t buy their mountain
home.
But, Davis insisted, things
will get better. It’s just going
to take some time.
The Enterprise Banquet
was designed to recognize
key business leaders for their
contributions to the community
and to provide insight
into the county’s economic
future. It drew representatives
of a number of local businesses
and industries, as well
as members of the county
board of commissioners, the
town boards of Franklin and
Highlands, the county economic
development commission
(EDC), state Senator
John Snow, state Representatives
Phil Haire and Roger
West, representatives from
the offices of Senator Kay
Hagan and Congressman
Heath Shuler, a number of
candidates for political office
and staff members of AdvantageWest.
The EDC hosted the
event, which was organized
by Trevor Dalton, economic
development coordinator.
Sponsors were Duke Energy,
Macon Bank and Angel
Medical Center. AMC
catered the dinner. |
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