Privatizing commerce has big political risks

Brad CroneNC Spin

April 19, 2013

My old boss, Lauch Faircloth, once made the comment in the early 1980s when he was a Democrat, that there were two things he couldn’t understand – electricity and Republicans. The quote infuriated Republicans at the time. I remember GOP stalwart Richard Morgan even had the quote blown up, framed and hung it in his legislative office.

Of course, Lauch Faircloth at some point figured out the Republicans because he became one – serving in the U.S. Senate from 1993-1999.

For me as a pro-business, fiscal conservative, social moderate, I’m still trying to figure out the new Republican administration.

As a Democrat, I believe that government has a role in overseeing markets and enacting regulations that provide for a fair and level playing field in the private sector. I believe that government has a role in working with industry and commerce to create new jobs and expand our economy.

Perhaps one of the most successful periods of growth in the state was under Gov. Jim Hunt from 1977 to 1985, with Faircloth at the helm of the Department of Commerce.

It was the halcyon days for economic development in North Carolina. But it also demonstrates today what a strong willed governor and a strong willed businessman can do working together.

Last week, Gov. Pat McCrory announced plans to reshuffle the Department of Commerce privatizing the state’s economic development efforts. The roles and functions of the state’s economic development arm will likely mirror those of Gov. Bob McDonnell’s Commerce Department in the Commonwealth of Virginia.

I’m not saying that you can’t privatize some functions in state government. I just don’t understand the politics of privatizing a department that can have such a huge impact on whether you remain governor or not.

Let’s take a second to look at the 2016 crystal campaign ball. The most important numbers for McCrory will be the following: (1) the state’s unemployment rate and (2) the number of new jobs created. Those two numbers will be the benchmark voters will use to judge whether McCrory deserves a second term in the governor’s office.

So why privatize a department that literally holds your political future in the palm of their hands? Clearly, the governor believes that a public/private partnership will streamline the department and cut through all the clutter in the economic development office.

There is no doubt that the Department of Commerce was a complete mess under Gov. Bev Perdue. There are horror stories in the private sector about getting calls returned. The projects they did promote were often at conflict with the policy goals of their own administration – i.e. the failed Sanderson Farms project in Nash County.

But do you need to privatize the department to improve it? Do you need to privatize it to improve operations and management?

Here’s the political reality — the governor has approximately a year to get the Department of Commerce converted and operational. Anything longer than a year and he will begin to hear the critics raising their voices. If he doesn’t have points on the board in year three – then he will hear a whole choir of criticism.

I have to give McCrory points for trying something different. But if this move fails, there will be consequences and repercussions.

Crone is a political consultant and panelist on NC Spin, a weekly panel discussion that airs on WMYT “MY TV12” at 10 a.m. on Sundays and on WJZY “CW46” at 6:30 a.m. and 11:05 p.m. on Sundays and on WFMY-TV at 5:30 a.m. Sundays.