A story in today’s paper summarizes a panel discussion that was hosted by the Searcy Rotary Club on Tuesday. The panel was made up of three local bankers and the topic was our local economy (Searcy and the greater White County area). The comments reported in the story demonstrate a mentality that has taken deep root in our community and or country as a whole over the last several years: ”government creates jobs.”
Now, I have not come out publicly in favor or opposition of this tax. I can see merits on both sides of the issue. But rest assured, if I decide to vote for the tax, it will not be because I believe I am voting ‘for jobs,’ as the proponents’ signs assert. I have been watching this debate unfold and staying relatively quiet about it, but these claims deserve to be analyzed.
Folks: Government does not create jobs. Taxes do not create jobs. Bypasses do not create jobs. And if voters really believed this theory, don’t you think they would be tripping over themselves to go vote for higher taxes? (Hint: they’re not)
To anyone who thinks that government spending or taxation creates jobs, I encourage you to look at the results of the Obama administration’s economic policies over the last 3 years. A stimulus package of $800 billion, full of infrastructure spending, that was promised to keep unemployment below 8%, has failed miserably. Almost three years after its passage, we are still feeling the negative effects as job growth is nonexistent and unemployment remains at 9%.
So now we have a group of politicians and bankers in Searcy/White County (and across Arkansas) who think that raising taxes–pulling more money out of the private sector and putting it into government–is the only way we can get our community growing again.
Here is a sampling of some of the statements in the article:
- “We need to keep our infrastructure moving forward and the best way to do that is to vote yes for the highway connector.”
- “Some of the opponents of the tax think that the reason the bankers are supporting that tax is because the banks will get all of the money, and that’s just not true,” he said. “We have to be visionaries because this tax supports where we work and where we live.”
- “There is still construction going on and there are still businesses coming into town,” he said. “There are still people that want to live in Searcy.” (so why do we need a tax to encourage growth that is already happening?)
- “I’m not a big believer in taxes, but the return on this initial investment is like a 401K match on steroids. I think this bypass will help Searcy become a town of choice for Little Rock commuters.”
I could nitpick these statements, but I think they speak for themselves.
There have been public comments made about this project by elected officials whom I trust, but I think they severely miss the point on this issue. Taking $15 million out of the economy and giving some of it back to contractors (who many believe will be from out of town) and putting a lot of it in asphalt will not create anything except a road. You’re taking from Peter and giving to Paul. You are rearranging money in the local economy, and actually sending some of it out of the local economy. This is a net of zero, or more realistically, a loss for the private sector.
Now, there is no doubt that strong infrastructure is an important part of economic development, and I believe this project will encourage growth in the city, but it is not going to create anything by itself. It must be coupled with a real plan for economic development other than ‘let’s raise taxes!,’ that would include aggressively recruiting industries, facilitating relationships with site consultants, etc. Also, being located relatively close to an interstate, a river, or a large metropolitan area are key factors for sustained growth. But this idea that Searcy can ‘become Conway’ or ‘become an industrial powerhouse through tax increases’ is just silly. Searcy is not Conway and it never will be. We are a very different landscape and its past time we start being honest about that. (I am going to follow up with more on this later this week)
At the end of the day, passing a tax increase during a recession for any reason is not going to stimulate anything. I understand that using the label “JOBS JOBS JOBS” is going to be popular during a time when everyone wants to be employed, and 10% of Americans are not. But just because the Arkansas Municipal League says that raising taxes is the only way we can grow our local economies does not mean it is true. I reject that assertion on its face.
If you want to vote for the bypass project, vote for it. More power to you. But please be informed and do not vote for a tax based on a failed economic theory that more money in the government means more jobs for you.
Again, I have not spoken for or against the proposal, but I think we should have an honest debate, and it is far past time that we had a serious discussion about real economic development in our community. I want it just as badly as the rest of you. I just want it to be real.