Something to Think About

Jul 27, 2015

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in Business and Economy, Federal issues, Politics

Last week I was reading in the New York Times an article on Jeb Bush’s plans for the economy. One of his talking points was to reduce the federal workforce by 10%. For a state as dependent on the Feds as Virginia, this could have serious financial implications. Already, in the CNBC rankings as the best state for doing business, Virginia has dropped from at or near the top to 12th in the most recent poll. One of the reasons given was the decrease in federal spending. We can debate whether the government spends, but such a cut in Northern Virginia and the Norfolk area could have significant impact.

— Les Schreiber

Les Schreiber

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CrazyJD

July 27, 2015

Wahhhhhh! Those poor federal employees making well over $100k a year. Boo hoo.

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LarrytheG

July 27, 2015

Many who say they want to cut govt are not focused on DOD but on non-DOD but the reality is that DOD is a bit of a misnomer because it does not include the VA, DOE ship reactors and nuke weapons, NASA military Satellites, Homeland security, plus active duty military end up comprising more than 75% of the govt jobs (and budget – because typically they do not include the 400,000 military contractors.

When they say cut 10% do they mean across the board?

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TooManyTaxes

July 27, 2015

I was invited to, and attended, the food truck bill signing in Tysons this last May. Among his remarks, Governor McAuliffe stated Virginia’s economy is missing $9.8 billion from federal cutbacks and, in his opinion, it’s not coming back. A lot of people, including many in state and local government, aren’t listening to the Governor.

Also, I don’t think we attract the type of people who can start, operate and grow businesses that are not related to Uncle Sam in one way or another.

Finally, Virginia is attracting a lot of low-skilled people, who produce less in tax revenue, while often needing more services. It’s all making retirement to North Carolina look better all the time.

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LarrytheG

July 27, 2015

I don’t think Nova/Md/Dc will stop being the HQ for most of the Federal agencies… not in turn – the lobby folks who tend to deal with the top dawgs on budget matters.

But the military itself wants to do more BRAC downsizing of field operations…and newer aircraft carriers and submarines are going to have
far, far fewer crew on them as the military moves more and more toward autonomous vehicles, air, land, sea and sub-sea…

huge transformation is underway in the armed services with regard to autonomous vehicles and robotization… etc.

and that’s opportunity for Virginia.. if they can get their head screwed up straight especially with regard to education.

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1. Cville Resident
  
  July 28, 2015
  
  Larry,
  
  I have wondered about this as well. It does seem that as DoD transitions to more robotics that Virginia should make robotics THE target industry for the Commonwealth. I have no idea if the economic development folks are doing that or not.
  
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John B

July 27, 2015

TMT, unfortunately your comment may be more prescient than we’d like to admit. I repeat it below:
“Also, I don’t think we attract the type of people who can start, operate and grow businesses that are not related to Uncle Sam in one way or another.”

Why is that considering the many positive aspects of our geography, rich history, climate, educational, natural and recreational resources, varied agriculture, cultural opportunities, etc.?

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1. Acbar
  
  July 28, 2015
  
  I don’t agree. It’s true that Virginia’s location, especially northern Virginia, attracts the Beltway Bandit types and all those lobbyists and such whose focus is the Feds and Congress itself; but those piranha are making money by applying free market skills, unlike the feds themselves.
  
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LarrytheG

July 28, 2015

I have a little bit more optimistic and pragmatic viewpoint.

for better or worse and until it changes – about half our entire US budget goes to National Defense.. not just DOD – but all the other things that are not classified as DOD that actually are essentially for National Defense.

And DOD is the preeminent R&D developer of technology is the US and much if not most of it bleeds into the civilian sector.

The most obvious examples are GPS and other satellites from weather to mapping to communications .. and the other autonomous vehicles – land, sea, air and under water and a third – cyber-security.

These are 21st century technologies that whether we like it or not are being funded by the govt and have tremendous potential in the civilian sector.

Virginia should not be fretting over the fear loss of bureaucrats and obsolete air craft carrier and submarines in Hampton.

We should be going after the emerging technologies full bore.

Our two biggest drawbacks are both education.

1. – first – we refuse to deal with the reality of the fact that our schools are not focused on core academics… to produce graduates skilled in hard science fields.

2. – our higher Ed schools are not focused on curriculum that are focused on 21st century technologies.

we’re giving full boat loans to academically mediocre folks who are pursuing easy-path degrees.. that have less and less relevance in the 21st century unless you want to work at Starbucks or other service occupations.

And – we do not teach nor incentivize entrepreneurship in K-12 nor college except for perhaps UVA.

90+ % of jobs these days are small business. Not just hair salons and tatoo parlors.. but tech start-ups… who know the technology but don’t know how to run a business.

so what is Va doing now? Well, mostly running around crying about the sky falling…

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Reed Fawell 3rd

July 28, 2015

I imagine that federal defense spending in Virginia will soon grow dramatically. If only because we will have little choice to do otherwise.

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