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Date:         Thu, 23 Jul 1992 08:49:45 EDT
From:         BAFEI@CONNCOLL.BITNET
Subject:      Economic Development
Comments: To: gop-l@pccvm.BITNET

Many people said that they did not get my Economic Development post.  When I
went to write it a few weeks ago, I realized that I speech I had given earlier
this year capsulized many of my ides fairly well.  Your thoughts and comments
are welcome
>
> I think there are some major problems on this godda*n network.  This is dated
> 1 July, and I got it today.  However, since I owe a ton of post and need to
> write them this will at least get one done.
>
> >
> > So, Brett. Tell me about these jobs you are going to creat in CT?
> > in an area of the state that is rapidly becoming the most troublesome
> > in terms of unemployment and drug traffic?  New London is falling
> > apart...whatcha gonna do?
> >
> > jcs (from CT and Fisher's Island)
> >
>                    A PLAN FOR ECONOMIC DEVELOPMENT
>          A speech delivered to the Connecticut Republican Caucus
>
> (For the rest of the list's benefits, I'm going to describe the general
> nature of Southeastern Connecticut and the State in general so that this
> makes a modicum of sense.  I believe that much of what I propose can be used
> at the Federal level as well.)
>
> (Southeastern CT is an area that historically has been dependant on its
> fishing and port facilities.  New London is one of the finest deep water
> harbors on the East Coast, and fishing fleets still ply the waters out of
> Stonington.  It should come as no surprise then that manufacturing drove the
> economy here so as to take advantage of the transportation facilities.  Cities
> such as Norwich were strongholds of light and heavy manufacturing, and they
> shipped their goods down the easily navigable Thames River to the port at
> New London and out to the rest of the country and the world.  Given the
> excellent manufacturing base, harbor and navigable river, the defense
> industry came into the area in the form of the Electric Boat Shipyard which
> is a division of General Dynamics that specializes in the construction of
> nuclear submarines for their sole customer, the United States Navy.  The
> Navy further utilized the resources of the area by locating their largest
> East Coast submarine facility on the Thames River in Groton.  However, not
> only was maufacturing strong, but the area was rather picturesque and
> tourism grew over the years, particularly in Mystic due to the world-famous
> Mystic Seaport living museum and the later addition of the Mystic Aquarium.
> Much of the rest of the region was filled with sleepy shoreline communities
> that doubled in size during the summer months, and rural communities.
>
> (In the 80's, the Reagan defense build-up caused expansion of production at
> Electric Boat which, as the largest employer in the region and second
> largest employer in the state, fueled a real period of prosperity for the
> region.  However, much of that prosperity was felt only in the suburbs.  New
> London and Norwich were falling on hard times and demonstrating some of the
> typical urban ills.  Plans were made to redevelop these cities, and in some
> cases ground was broken, but almost all work was stopped when the recession
> hit, and the damamge caused by that recession was significantly compounded
> by defense cutbacks in submarine production which threaten to close Electric
> Boat and ultimately lay-off 22,000 people in this region.  Many of these
> lay-offs have already occurred.  People now realize that the area needs to
> diversify, and with the construction of a huge casino on an area Indian
> reservation, people seem to believe that perhaps the expanded tourism might
> be the answer.  Now to the speech).
>
> Whether or not you liked the economic policies of Ronald Reagan, there is
> one indisputable fact.  There were more jobs during that growth period than
> there were at almost any other time in this country's history.  What makes
> that so interesting is that this growth in the job market occurred during a
> time in which the total number of positions at Fortune 500 companies
> shrank.  What this says is that growth during the 80's was fueled, at least
> in part, by small and medium business growth.  It is my belief that it is the
> encouragement of similar development that is the key to economic recovery
> for the State of Connecticut.
>
> Unfortunately, we live in a state that has not been traditionally friendly
> to the business community.  We have suffered under the highest corporate
> taxes in the country which has caused Stamford, CT to lose its once propud
> position as the US city with the most Fortune 500 headquarters.  It is
> this business unfriendliness that has caused such firms as United Parcel
> Service to relocate to Atlanta and Stanley Works to build new manufacturing
> facilities out of state.  The state has traditionally not come across with
> the packages of assistance and incentives that lure and keep companies in
> this state.  This needs to change.  Connecticut has much to offer business
> with its excellent infrastructure and skilled workforce.  We need to
> identify ways to exploit this state's resources to create jobs here in
> Connecticut.
>
> The major key to all of this is the cutting of state taxes.  Companies have
> the incentive to go where they can keep the greatest amount of their
> income.  High state taxes prevent companies from doing that in Connecticut
> and therefore make other states more attractive to do business in.  The
> problem is that we have had such a period of fat in this state that the size
> of government became bloated because, well, we thought we could afford it.
> Well, today we can't.  The legislature needs to take serious steps in
> cutting the state budget, and that unfortunately means that the legislature
> is going to have to make serious cuts in state governement personnel.  This
> is tough to do when your main concern in the Legislature is getting
> reelected and state employees constitute a large block of votes, but that
> gets into why term limits are important and that is another speech.  Suffice
> to say that the legislature is going to have to take the hard hit and make
> the cuts to bring the state system into line with economic reality.
>
> My analysis of the State budget convinces me that at the current rate of
> taxation, we would have SIGNIFICANT surplus revenue after making all of the
> prudent cuts.  If we choose a rate of taxation that falls between the rate
> that would just balance the budget and the present rate, we would generate a
> pool of surplus funds that would still have a lot of money but would not
> cost the taxpayers nearly as much.  Lets call that new pool the sanity
> dividend.  This dividend is the key to economic recovery.  We can divide
> that pool into two halves.  One would be called the Capital Pool and the
> other would be called the Education Pool.  Let's deal with the latter first.
>
> One of the largest drains on the state budget is public assistance and
> unemployment.  We need to take some tough steps to reform these areas.  No
> longer can we allow long term living on welfare and unemployment.  These
> have to be programs with short terms.  However, that doesn't mean that after
> the term runs out that a recipient is totally cut-off if he or she has not
> found work.  Rather, I want to use the Education pool to allow these people
> the opportunity to finish high school, attend a state college, and/or learn
> a trade.  If someone were doing this and making satisfactory progress, then
> the state would continue benefits and offer day care to those who need it.
> I would even support free drug treatment to those who needed it if it would
> get them trained and off state assistance.  Hopefully, once trained, these
> people would be more attractive commodities in the job market.  Those who
> refuse to be educated for the working world will no longer be supported by
> the state after the short term period outlined above.  The cost of all of
> this is still far cheaper in the long run then allowing people to remain on
> welfare as long as they do, and the potential returns in tax revenue from
> productive employees increases the level of long-term state savings which
> could possibly translate into further tax cuts as state spending needs
> decrease.
>
> We now have a highly educated population with no place to work, so a
> concurrent plan needs to create jobs for these people.  Traditionally the
> way to create jobs have been to offer tax incentives to relocating or
> growing business and offer some sort of loan guarentees to small business
> start-ups.  I don't think that this is all we should be doing for business,
> particularly small business.  I would like to take that Capital pool and use
> it for venture capital investment.  I want to give people who are starting
> their own business the opportunity to have the state as a minority investor
> in the business.  People who take advantage of this will be given access to
> state (paid or contracted) business consultants who will help the new
> business owner in such areas as market development, sales, inventory
> control, and payroll management.  The state would NOT be a day-to-day
> manager, but would act in a way that small stockholder does in a
> corporation.  The state would recieve a dividend profit on the investment
> which could either be reinvested into the Capital Pool, the Education pool
> or used to pay for other state obligations and services.  Now ultimately the
> state will not be a long term investor.  I would imagine that the avearge
> length of investment by the stae to be about 5-7 years.  After that, the
> state has the right to sell its shares with the majority stockholder having
> right of first refusal to buy.  Now there might be certain investments that
> perform incredibly well, and the state would do well to hold on to them, but
> after ten years, the state would have to sell out at fair market value upon
> demand of the majority stockholder.  All decisions concerning investment of
> the pool funds would be made by a private, non-governemntal management firm
> who would be paid a percentage of the profits, not a set fee, thereby ensuring
> that they make wise investments without politcal motives which politicians
> are unable to do. Potentially, if the pool is invested wisely and proves
> profitable, revenue generated could create a further tax cut.  We can help
> these businesses become even more likely to succeed by offering free state
> assistance in developing a business plan and by offering low rent incubator
> space which provides an office and clerical services for one monthly rental
> fee.  We might even place the above-mentioned state consultants in offices
> located in these business incubators.  There is no question that such a
> program would be both attractive and useful for the newly educated and trained
> individuals who are coming out of the Education Pool.  I propose that these
> people should have the first opportunity for these funds.
>
> One of the things that we must recognize is that many of the people who will
> benefit from the programs funded by the Education Pool traditionally live in
> low income areas that provide little opportunity.  We must provide
> incentives for people to locate businesses and invest in these areas.  The
> enterprise system proposed by Secretary Jack Kemp is good, but it does not
> go far enough.  We need to develop a two-tiered investment program for
> low-income areas.  One set of tax credits and incentives would be given to
> any business that invests in the area, but for a businessman who resides in
> the area, there would be a second set of incentives and credits that
> would make it even MORE attractive for someone within the community to
> invest in that community.  We might even want to consider adding additional
> incentives for those who propose to start or expand manufacturing in these
> areas as it is well established that jobs in manufacturing are typically
> better paying than ones in the service sector of the economy. This plan
> recognizes that ANY development would be better than the present state of
> affairs in low income communities, but it also recognizes that development
> done by those who live in the community will allow the profits to be kept and
> re-invested in the same community versus being drawn away by someone from the
> outside.  The enterprise zones would have the full access and support of the
> resources detailed in the Capital Pool plan, and it might even be possible
> that some of the incubator spaces could be placed inside the enterprise zones
> at extra-attractive rental rates to promote development in traditionally
> poorer areas.
>
> None of these ideas are quick fixes, but they are the kind of ideas that
> will keep this state economically healthy during all types of fluctuations
> in the economy if we are willing to invest in them.  We have to stop looking
> at ideas like casinos in Hartford and New London and state tourism as answers
> to our states problems.  All this does is put all of our eggs in one basket
> again and when there is a downturn in the economy we will suffer again.  The
> money generated by these types of facilities, casinos in particular are rarely
> reinvested in the community and often, due to absentee ownership, none of the
> profits are even spent in the local economy.  Further, most of the jobs
> generated by such facilities are low paying which does not do anything about
> the fact that it is rather difficult to live in Connecticut in a service
> job.  This is not a cheap state to live in.  Rather, we have to position
> ourselves as an attractive state to develop manufacturing facilities.  We
> have the infrastructure to support them, the workforce to work for them, and
> the knowledge to manage them.  With the right sort of incentives, this
> should be a place where manufactures should be flocking to.  With the types
> of programs that I have talked about, they will.
> ------------
>
> This speech was well-received by the audience and is serving as the
> cornerstone of my campaign along with such ideas as privatizing the port
> facility and other smaller things.  Many of the ideas that I have listed
> above could be put to work on the national level with some modification.
>
> Two questions:
> 1) What are your thoughts on this plan?
>
> 2) How many of you stayed with me this far?
>
> >From the campaign trail...
>
> Regards,
>
> Brett
>
> --
>    ________________________________________________________________________
>    | Brett A. Feinstein                       |  Elect BRETT FEINSTEIN    |
>    | BITNET: bafei@conncoll.BITNET            | 39th District State Rep.  |
>    | internet: bafei@mvax.cc.conncoll.edu     |    for New London, CT     |
>    | Voice phone: 203-439-4021                |  "Creating jobs instead   |
>    | snail mail: Box 3337 Connecticut College |     of taxes for CT"      |
>    |             270 Mohegan Avenue           |                           |
>    |             New London, CT, USA 06320    |  Vote REPUBLICAN in Nov.  |
>    ------------------------------------------------------------------------
>
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