Unemployment and Job Creation

Ok, so... Let's see what these candidates stand for. I'll start with the economy, since that's one of (if not the biggest) driving force in these elections.

Unemployment & Job Creation

Nikki Haley. Three biggest things I see associated with her and unemployment is 1) she wants unemployment beneficiaries to pass a mandatory drug test, 2) she's trying to pin it on Sheheen that the state's unemployment fund is empty, and 3) she wants to cut small business taxes.

That being said, there are other things she's talking about doing, too, they just aren't getting as much attention. We can still take a look at those ideas, though.

Back to point one. I think the drug testing thing just wouldn't fly in SC. I mean, while I don't exactly agree with someone getting high on unemployment funds, I just don't think this is something the state can do to people. What about the other household members of someone receiving unemployment benefits? There's a similar argument going on in New York where Mayor Bloomberg wants to make it where food stamp recipients can't use their food stamps for sodas. There's also the issue that unemployment benefits are not welfare. Extended benefits are, but the first round of benefits you receive after being unemployed comes from the fruits of your labor. People have to work to get those benefits, and the right of the Government to say what you can and cannot do with benefits you technically earned is the issue at the heart of this.

Point two. This is a little taken out of proportion, but the point is that Sheheen didn't do everything he possibly could of done to stop this from happening. What had happened was... Sheheen was on this committee (of 6 Republicans, and 2 Democrats) at the time (2008) which screened candidates to be placed on the Employment Security Commission. From the Employment Securities website, you can see that they handle all unemployment claims, and workforce type of things for the state. So, Sheheen and these other seven State Senators were in charge of helping to put together the people that basically run the workforce management in SC. Haley's point here is pretty far out there, but the bottom line is that maybe Sheheen could have done something to make sure SC's unemployment funds didn't dry up during record levels of double digit unemployment in the state. I severely doubt it, however.

Point Three. I said cut taxes, but what she actually wants is to completely eliminate small-business taxes. Her argument (from the Post and Courier):

The four or five states in the country that have no corporate income tax have the lowest unemployment numbers.

Ok, that's not a terrible argument. I can agree to small business tax cuts (not elimination), but what's going to pay for this? I'm not a big fan of trickle-down economics anyways, and giving corporations more money isn't something I am too keen on. However, it comes down (to me) as a question of how small of a business are we talking? It'd probably get me a little pissed off if she got to do this, and her mom's company that "has an annual revenue of $500,000 to $1 million and employs a staff of approximately 1 to 4" got their taxes eliminated.

Her other ideas include privatizing the Workforce Centers, improving infrastructure, and educating the workforce in tech schools. I'm all for the last two ideas, especially improving infrastructure. As far as privatizing Workforce Centers goes, I'm not too sure about that. I am totally for exploring the idea, though.

She talks about some general reform ideas regarding the tax code that I like. From her site:

While the Department of Revenue administers 32 taxes, only three of those taxes generate over 90% of General Fund revenue: the individual income tax, the corporate income tax, and the sales and use taxes.  The remaining taxes add layers of bureaucracy, while garnering little revenue for the state...

... Simplifying the tax structure will help businesses understand and comply with tax codes, while simultaneously shrinking South Carolina’s tax bureaucracy.

I like this idea. While it may have seemed good at the time for SC legislatures to set up some taxes the way they did, it's clearly not benefiting us if it takes 29 different taxes to generate less than 10% of our state income. At the same time, those 29 different taxes all have to be handled by people in some Government office somewhere, eating up taxpayer resources. I'm sure there's a better way to go about taxing whatever it is that is getting taxed, without needing 29 different tax streams each complete with matching sets of loopholes and exemptions.

Onwards to Vincent Sheheen. He wants to "be personally involved in economic development and recruitment", work on connecting unemployed people with open jobs, and creating a "Department for Entrepreneurship and Small Businesses". He's got a Job Plan PDF here that outlines his entire plan. Number 2 in his plan is to prepare our ports for the Panama Canal expansion in 2014. Like Haley, he wants to focus on tech schools to get a more educated workforce. There a smattering of alternative and nuclear energy talk at the bottom that makes the chemist in me cheer.

Being more "personally involved" in trying to get growth going in the state sounds pretty nice, but it also sounds like one of those things that always get put on the backburner for something more immediate. Maybe he makes plans to go visit businesspeople one day as Governor, but something comes up, he sends someone else. Next time comes around, he makes plans to meet with business owners, but he has to go take care of something else... ect, ect. This seems to me like one of those kind of things that would be great if he did, but it's the kind of thing politicians often don't actually follow through on. So, kudos to him for being ambitious, but will it really happen?

I think Mr. Sheheen would excuse my skepticism of politicians. One of the things I've seen him talk about when going through articles and interviews for the blog, is that people don't trust the Government. Which is healthy, in my opinion. People shouldn't trust the Government. It helps keeps abuse to a minimum. So, my point is that I don't mean to be overly critical of Sheheen and Haley, but I generally come at any politician with the idea that they're lying to me foremost in my mind... just in case.

Back to this Department for Entrepreneurship and Small Business thing. I'm not a fan of this idea. What do we have a Department of Commerce for? Fix them, don't duplicate them. I think this Department would just add another layer of bureaucracy to this system, which in turn would cost taxpayer dollars to fund. I just think we ought to fix what we have, or even if it's found to not be broken, but not capable of doing this job, then expand them. Pick up a few more people to work out of the Commerce Department. The people there already have resources for this type of job, they're already familiar with this type of thing. Take advantage of that.

I really like this whole thing he's got planning for the Panama Canal expansion. I was very impressed to see him already talking about taking advantage of what it could do for our port cities. That's good planning, and it's good economics. 

I'll take a moment to go through Morgan Reeves's ideas. He wants to improve infrastructure, which is good. Infrastructure work is great for times with high unemployment. In the same line of thinking as infrastructure, he wants to upgrade and improve South Carolina buildings, make them more green and energy efficient.

He's got this great big High Speed Rail idea. Now, I'm all about some green technology, but this kind of stuff just doesn't work in America. Anyone interested, or with the time, should read this. It simply doesn't pay to take public transportation in America in many cases. The author of that article outlines a simple equation showing the problems with this (bolding is my own):

The cost of a transportation system is first of all, any flat fare. Call that F. Then there's a cost per mile (call it C) and the mileage (M). The value of your time we can call S (salary per hour), and the time it takes to travel is T. So we have Cost = F + CM + ST. Time will be mileage divided by your speed (V), so we have Cost = F + CM + SM/V = F + M(C + S/V). We can see that cost increases with mileage (obviously), high time value (every minute traveling costs more) and low speeds.

Reeves wants to make rails between all of our major cities. That's high mileage, and high time value. No amount of high speed is going to offset how much it just simply won't be worth the trip to the majority of South Carolinians. Reeves talks about how the train will be partially solar powered, and will generate income for the state, but the reality of rails is that they end up costing governments money. They either have to tax drivers to make it more expensive for them to drive, or lower the cost of using the rails to where it becomes more financially realistic. Either way, someone has to put out some money. You need far higher volumes of riders than we can generate in South Carolina to make something like this work. As much as I think it'd be awesome to have a rail that "will run alongside the interstate or in the median", the reality here is that this just wouldn't work.

If you take the time to look through Reeves's page I linked to above about the issues he talks about, he goes through a few more ideas. By and large I find them to be highly idealistic, though. They're good ideas on paper, but expensive to implement (solar panels on homes and schools), or they just expect too much from people ("Ask every business and citizen to donate $100 a year which would raise $400 million for our schools"). 

In the next post I'll get into some more issues, and the way each of the candidates say they'd handle them.

-Ray