Bacon's Rebellion

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Kaine: Virginia Must Be a “Winner” in Global Trade

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James A. Bacon
in

Gov. Timothy M. Kaine sounded the right note on “global competitiveness” in an address to the 58th Virginia Conference on World Trade in Roanoke yesterday.

“We ought to decide that we want to be winners and do what it takes to be winners,” Kaine said, as reported by Rex Bowman with the Times-Dispatch.

“Attitude toward globalization is a key component. So many communities in Virginia have lost jobs overseas, have lost economic opportunities. In many parts of Virginia there is understandable anxiety about the global economy. Can we acknowledge that anxiety but really go after global connections? We are better positioned than any other state to be winners in a global economy.”

Global trade is a net positive — it creates far more wealth than hunkering down with protectionist policies. At the same time, trade creates short-term losers. Rather than insulate the losers from change — a recipe for stagnation — state policy should be to help the losers adapt. That’s why the Kaine administration task force on workforce development is so crucial. Virginia needs to do a better job of mobilizing its resources to help workers displaced by trade (or, more frequently, by new technology) learn new, more marketable skills.

It’s also crucial that the state find solutions for moving freight out of the increasingly bottlenecked Virginia ports. So far, most energy has been expended on building a Third Crossing, widening Interstate 95 and building a new U.S. 460. Perhaps we also should be examining the option of using Public Private Partnerships to increase rail capacity out of the ports. Just a thought…

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11 responses to “Kaine: Virginia Must Be a “Winner” in Global Trade”

  1. James Atticus Bowden Avatar
    James Atticus Bowden

    Jim: re “So far, most energy has been expended on building a Third Crossing, widening Interstate 95 and building a new U.S. 460.”

    Energy to raise taxes, but not the initiative to make a solution.

    A legislator in the GA, an elected politician of either Party, could submit a bill that improved the 460 corridor for rail and road, made the connection over to the Port of Virginia and added lanes (bridge and tunnel) for the Hampton Roads Bridge Tunnel.

    That bill could include the tolls and dedicated resources from the Transportation Trust Fund and General Fund to pay for the projects.

    This isn’t rocket science.

  2. Larry Gross Avatar
    Larry Gross

    if Kaine and the Senate were truly focused on transporation – they would be focusing on approaches like JAB is suggesting.

    We have a special session that is ONLY about transportation and what comes out of it? Nada.

    Unless we continue to throw money down a rathole.. the Senate will not engage the issue.

    That gives me LOTS of warm fuzzies that the Senate is really interested in long term solutions. NOT!

  3. Gold_h2o Avatar
    Gold_h2o

    From the TD, “Virginia exported $12.2 billion of merchandise last year, and more than twice that much in imports passed through the state, according to the Virginia Economic Development Partnership.”

    Stated another way, when a train leaves the port it’s full, but when it returns to the port it’s only half full. Global trade has indeed created far more wealth…for a select few.

    That said, we need to figure out a way to send the trains back to the ports full of cargo as opposed to half full.

  4. James Atticus Bowden Avatar
    James Atticus Bowden

    GoldH2O: You need to look at each step of the process for any product – and service – and see how much value is added (real capital created) and who gets what.

    If more money is made in the retail sale than in the manufacturing, and Americans make money at every step of the process, then what difference is it if it is actually made in a factory in China? The other points where capital is created – make jobs too.

  5. Jim Bacon Avatar
    Jim Bacon

    Gold H20, We’ll never send the trains back to the ports full. An increasing percentage of U.S. exports consist of either services or extremely high value-per-pound products (like microchips) that are transported by plane, not freighter. Even if our balance of payments were not in deficit, the cargo balance is not likely to return any time soon. We export brainpower and import raw materials and manufactured goods.

  6. Gold_h2o Avatar
    Gold_h2o

    “The other points where capital is created – make jobs too.”

    Good point.

    I guess my “beef” with Global Trade is that I have seen the effects of what it does to factory folks. Telling a 52-year old factory worker to go back to school and learn a new skill is a tough sell.

    Question: Does the state currently get any “tax revenue” from all of those cargo crates sitting around in the ports?

    In other words, who pays the bill for a cargo ship using the port and how much is the fee?

    The only reason I ask is because the government willingly taxes commercial property in the form of a property tax, (and a lot of other goods and services for that matter)and the building is just sitting there. True, it uses water/sewer and a few other public services but it also generates A LOT of revenue in the form of sales taxes, etc. Cargo crates full of goods also generate A LOT of revenue and they are just sitting there (similar to property)….why should the crates get off with a free ride?

  7. Ray Hyde Avatar
    Ray Hyde

    The ship operators pay the fees and pass them on to their shippers.

    The fees are substantial, but I doubt that they mean the port is operated in the black. the port also generates money in other ways, but it may not go directly to the port.

    I imagine it is like Metro, it operates at a loss to benefit us all, supposedly.

  8. Jim Bacon Avatar
    Jim Bacon

    Gold H20, Good questions about the ports and taxes. I don’t know the answer. But I can tell you this, for Virginia blue collar workers, the ports are a blessing. Many, many retailers companies have set up warehouse/distribution operations in Virginia to take advantage of proximity to the Virginia ports. Those centers employ a fair number of people (though rarely as many as a factory would do). But a significant number of manufacturers who locate in Virginia do so because of proximity to ports. In many cases, they’re actually exporting product. (We do export manufactured products from Virginia — just not as much as we import.)

    The ports are one of the strongest assets cited by economic developers as they try to recruit new manufacturing to the state. Manufacturing prospects are getting fewer and fewer, but the ports give us a strong competitive advantage for the shrinking pool of prospects.

  9. James Atticus Bowden Avatar
    James Atticus Bowden

    GoldH20: Excellent to put in the human dimension. I taught a Sunday School class in the 90s when the NN Shipyard went from 30k employees to 18k today. Every man, except me and one other guy, worked there. Many were second generation ship builders. I saw hard-working, courageous veterans who were worried to death how to transition in their 50s.

    The fact is that people can go through hard times. Not their fault. Life isn’t fair. Really hard when it happens. Which is why I keep coming back to communities of common interest for health savings and other savings accounts.

    If our Commonwealth, city and county governments violate the laws of economics less often and to a lesser degree, the capital that is produced makes jobs. And, the capital creates opportunity for people to use their freedom to create new, different job-producing businesses.

  10. Ray Hyde Avatar
    Ray Hyde

    Right on.

    But what happens when you lock up tons of capital in such a way it can never be tapped? Doesn’t that kill jobs and more wealth creation the same as if it was taxed?

  11. James Atticus Bowden Avatar
    James Atticus Bowden

    Ray: Lock up capital by not allowing development? Like putting a house on your farm? I just don’t know how to square the rights of property with the limits of development other than zoning – through representatives elected by a majority vote. I just dunno.

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