The sky is not falling with the N.C. economy
By John Hood
As a kid, I always loved hearing the story of Chicken Little. I enjoyed the rhyming names — Turkey Lurkey, Goosey Loosey, Ducky Lucky and so on. Though the fowls’ fate as a meal for Foxy Loxy struck me as regrettable, I saw the tale as a useful warning against letting panic get the best of you.
In the 2005 Disney film version of the story, there was a clever twist: Chicken Little turns out to be partially right. Something really does land on his head, and it turns out to be a panel from a spaceship. He and his friends end up saving the day, and the audience realizes that perhaps people ought to perk up whenever someone exclaims, “The sky is falling!”
Cute film, bad message. The original story had it right. Extraordinary claims of impending doom and gloom require extraordinary evidence, which is usually lacking. Politics is full of Chicken Littles, irresponsibly warning of great calamities unless “something is done” — or unless voters defeat their rivals in the next election.
Lately, we’ve seen many Chicken Littles in North Carolina politics. Remember back in 2014, when progressives predicted a state budget deficit in the hundreds of millions of dollars? They took a few months of data early in the fiscal year, extrapolated that the fiscal sky was falling, and then looked very foolish when North Carolina ended up with a series of healthy budget surpluses.
Remember when progressives predicted that North Carolina’s new conservative policies on taxes, regulation, spending, education, unemployment insurance and other issues would damage the state’s economy? That didn’t happen, either.
Since these policies were enacted, North Carolina has outperformed most of its competitors on most measures of economic performance. From 2013 to 2016, North Carolina’s gross domestic product rose 13.8% vs. 11.3% for the U.S. and 12% for the Southeast. Our growth in personal income per capita and employment also beat national and regional averages. On median household income, North Carolina’s performance was mixed: Better than the Southeastern average, slightly below the U.S. average.
On the broadest measure of the labor market — the U-6 rate, which includes the reported unemployment rate, discouraged workers who’ve exited the labor force and part-time workers who’d rather be working full time — North Carolina posted a decline of 5.3 percentage points. That’s one of the largest labor-market improvements in the country.
It would be premature for Republicans to claim full credit for the state’s robust economic performance. My point is that those who predicted disaster were wildly, ridiculously in error. They wanted it to be true — not because they wish North Carolina harm but because they passionately believe their ideological vision is correct.
I don’t want progressives to end up in the belly of a fox. I just want our political conversation to be something more than competing claims of falling skies.