State, federal governments are both hurting rural economies

If you’re an economic conservative, you probably think there isn’t much government can do to create a strong economy. Infrastructure is necessary, as is an educated workforce. But government’s best role is in not mucking things up.

Unfortunately our state and national governments are making mistakes right now that are mucking things up. In both cases, the news isn’t good for rural jobs in Washington.

We need people fighting for, and focused on, rural jobs. I use the term broadly here – Washington outside of the red-hot Central Puget Sound. While the state economy is strong right now, our unemployment rate continues to lag the national average, and many of our rural counties lag the state average.

Permitting fairness – boring topic, big impact
Many leaders in state government say all the right things about One Washington and bringing prosperity to all parts of the state. But when actual development opportunities that would create jobs are proposed, they blanch.

We’ve seen that clearly with the Inslee Administration’s approach to a project that would benefit Cowlitz County. The Millennium Bulk Terminals project would create high-quality jobs for Longview, but it was clear from the start that Inslee’s Ecology Dept. would deny needed permits. (Full disclosure: I represent a client that has joined a federal lawsuit challenging the systematic use of permit denials by Gov. Inslee and others to stop this project.) Political disapproval of one of the commodities for export – coal – set the department against the project no matter what.

Ecology’s unprecedented “global EIS” it applied to the Longview project put many industries on notice. Permitting in Washington is no longer about predictable rules, it’s about political whims.

It’s families in the Longview area paying the price. Sen. Dean Takko (D-Longview) wrote recently:

If we, as a state, are truly serious about jumpstarting economies in every community – not just the Puget Sound region – then we have to have an honest conversation about how projects are permitted. Because as it stands currently, politics reigns supreme in state agencies like Ecology.

A big bite of the apple
On the federal level, the shift away from free trade is leaving many industries nervous about the coming consequences. For many Washington farmers, those consequences have already morphing from the hypothetical to the all-too-real.

Washington apple growers, for instance, face new 20% tariffs in their largest foreign market, Mexico. The tariffs are retaliation for new tariffs slapped on our closest trading partners, Canada and Mexico. Mexico typically buys 10% of total Washington’s apple harvest (not 10% of the export market, 10% of the whole crop), but tariffs will lower that. Growers will try to increase exports to other markets, but extra product sitting in warehouses will deflate prices.

Many other crop and commodity organizations are nervous, or already feeling the pinch. All of this comes at a time when farm incomes are down and the American farmer’s share of the dollar has declined. The path to prosperity for Washington farmers is not higher tariffs and closed markets.

Who is the pilot, and is there a flight plan?
What various American industries need right now is some sense that our trade policy is leading somewhere. It is one thing to say we’re pursuing bilateral agreements instead of large multilateral deals – what’s missing is any action to make those happen. As other countries press ahead on the TPP, for instance, what many businesses here see is new advantages for foreign competitors that they won’t have.

There are complicated issues behind our current dispute with China, including very legitimate concerns over intellectual property, information sharing, and industrial espionage. But make no mistake, a trade war with China will be bad for Washington. And what is more confounding is the squeeze being put on our closest allies.

American tariffs targeted at foreign steel and aluminum hurt domestic industry far more than they help. Companies that consume steel and aluminum – and turn them into high-value products – contribute far more to the American economy than those that create them. Higher metal prices hurt our manufacturers.

With these tariffs, we’re shooting ourselves in the foot. We’re alienating our closest allies. And the first people to bear the brunt of the world’s reaction are our farmers.
-Rob McKenna

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.