Monday, June 29, 2009

Simply put: I am disappointed

Bluffton Today

Like many of you, I am saddened and disappointed by the recent revelations concerning Governor Mark Sanford. My personal inclination is to let this matter evolve on its own without further comment. However, considering the volume of interest and concern expressed in the many calls and emails I have received on this, it seems that I need to devote this one, and only one, column to this dispiriting matter.

In my view, we need to bisect our treatment of last week’s disclosure. There is the personal side, which is one of undiluted sadness, and then there is the political/professional side, which is another thing altogether.

From my personal point of view, this whole international soap opera is very close to excruciating for me. With the exception of the woman from Argentina, nearly every one of the characters involved is a personal friend of mine. I like and admire both the governor and the first lady. Their family reminds me of my family, which was a gaggle of rambunctious boys with two loving parents. I also know most of the staff people in the governor’s office who are now under the glare of constant media. Even the security team that lost their charge for nearly a week are folks that I think highly of and chat with from time to time. While I feel bad for them all, it is Jenny and the boys that have my most heartfelt sympathy. They didn’t deserve any of this.

The political/professional side of this mess is not nearly so problematic for me. Simply put: I am disappointed. The bad behavior of the governor has created an unfortunate distraction for those of us who take seriously our commitments to deliver our state to higher ground above the current flood of economic distress. I wanted to write a column this week on what a great job Doug Robertson is doing on the Ports Authority Board. Instead, you get to hear me rant about the fallout from our governor’s big adventure.

Eventually, the General Assembly will have to sort through all the nagging questions that flow from this incident. Was public money misspent? How do three agencies tasked with protecting the chief executive manage to lose him for almost a week? Was staff complicit in the “disappearance”? How did the tracking device on the state vehicle driven by the governor become disabled?

I would prefer to use our legislative time figuring out how to educate our children, or protect our waterways, or how to create a proper tax structure that won’t collapse under financial strain, than sort out the particulars of the governor’s mid-life crisis.

Many of your calls and emails asked whether Gov Sanford should resign, be impeached, or allowed to stay and try to redeem himself. My answer is this: Your representative will not join any effort to impeach or force the governor to resign. My sense is that the succession is potentially so troublesome, we would be better off with the governor for the next eighteen months.

What may occur is the international soap opera may very well continue to grow until the Sanford family will have no chance at peace or reconciliation until the governor leaves the stage. Summer is a slow time for news and this affair has been a gold mine for the 24-hour news outlets. When you overlay the left-right battle between Fox and MSNBC, we have a story that will have long legs. All the while, our state is viewed internationally in the light of shame and ridicule.

In short: the governor can stay, but the story needs to go.

Monday, June 22, 2009

Governer earned his veto overrides

Bluffton Today

The one-day wrap to the session was over by close of business on Tuesday. Most of the outstanding business had to do with dealing with the governor’s vetoes and finalizing the creation of a tax reform study group that will look seriously at how we raise money to do the people’s business in the future. (Yes, Karen, we are looking at the Fair Tax.)

All 10 of the vetoes were overridden. There were two pieces of legislation that became law after the overrides that, for the life of me, I cannot understand why they warranted a veto. One was the Buy South Carolina legislation, and the other was the Payday Lending Bill.

The Buy South Carolina legislation was simply a bill to give a preference to in-state suppliers when the state makes purchases. In my view, this was first and foremost, a jobs bill. Even if there was a price difference, which is often negligible, between the in-state and out-of-state product, the fact that local products mean local jobs makes the difference meaningless. This was clear to virtually every member of the General Assembly, but somehow escaped the governor. It was not an agonizing decision to override this veto.

You have heard me more than a few times talk about how jobs and economic development will trump, in my book, ideological purity any day, any time. There is a general consensus in the legislature that the governor’s veto in matters such as this has to do with a particular brand of libertarianism, and a constituency largely beyond the borders of our state. This may or may not be accurate-- I can’t say. I do know that my constituency is you, my neighbors and friends in District 118, with a view to the greater good and prosperity of our state. I represent you and I am responsible to you and for you.

The second veto that I think was particularly ill considered was of the Payday Lending Bill. This bill had been in the pipeline for literally years. Opinion in the legislature was all over the map, from outright banning the industry to allowing them to essentially self-regulate. The biggest issue was what constitutes fair regulation of an industry that many believe takes advantage of people who can least afford it, and who are most vulnerable to the temptation of “easy credit”.

We struggled with this for several sessions, hearing from all the stakeholders and hearing story after story of people getting over their heads into unmanageable debt. We pretty much wrestled it to the ground and came up with a bill that was reluctantly agreed to by both industry and consumer advocates. It was ultimately passed by the House 102-6 and in the Senate by 41-4.
The legislation puts into place significant safeguards to protect consumers and also creates a database to make sure that particularly improvident borrowers are not “flipping” loans, that is taking out new loans to help retire old ones. Depending upon where you stand, this legislation is either an interim step toward ultimately banning the industry, much like we did with video gambling, or a reasonable step toward regulating a problematic but necessary business which provides emergency liquidity to persons unable to access capital from traditional sources.

The governor vetoed the bill on libertarian grounds: people need to be free to make their own mistakes and live with the consequences. Libertarianism makes for good sound bites but oftentimes ends up looking like the law of the jungle in practice. The vote to override was not even close.

Monday, June 15, 2009

Developers can't see into the future, either

Bluffton Today

Before we begin, I’d like to make a comment on the recent revelations concerning the Sea Turtle Center and Crescent Resources. As a businessman and developer, I respect the courage and creativity that have gone into both these enterprises.

Lori Kaylor, developer of the Sea Turtle Complex, is a friend whom I hold in high regard. She is also a smart woman who put together a great project out on the Buckwalter Parkway that has provided a number of small entrepreneurs a venue for putting their ideas to the commercial test. In my view, she has been treated badly by the press for failing to anticipate what the smartest minds in both the public and private sectors also failed to predict, that is the collapse of the real estate market.

Similarly, Crescent Resources, the developer of two of the flagship properties in the Lowcountry, Palmetto Bluff and Oldfield, is being forced by circumstances not of its making, into arrangements that seemed vanishingly improbable just a few months ago.

It seems that sometimes folks whose ideas and business practices are above reproach are diminished by macroeconomic forces put into play by entities for whom nothing is unthinkable-- who view reasonable regulation as something to be gamed and finessed-- to the detriment of those who play by the rules.

While the General Assembly can’t do too much about credit default swaps or the more arcane derivatives that pushed the economy off the cliff, we can do something about the more banal forms of bad business practice. Such was the case with the big banks that issue credit cards and unfortunately seek to maximize profit by playing games with interest rates and terms and conditions of use.

Most of you know that I was one of the originators of the credit card legislation in South Carolina, which was later adopted by the federal government. The reason for this was that I heard from so many of you about what you were enduring at the hand of the credit card issuers. The stories were many, and each one made me madder than the last. As I started to work on the legislation, we were confronted with a barrage of hardball lobbying from the banking industry. This is the same banking industry that played a key role in the above-mentioned “macroeconomic forces” that are contributing to the local dislocations about which we are reading.

Let me be clear on this: this is not about your local bankers, the folks that you might see having lunch at the Sippin Cow or May River Grill. Small and moderate size banks managed to maintain good, fiscally sound, conservative business practices when their larger competitors were exploring the brave new world of hyper-leverage. The smaller guys also didn’t even quiver when the giants were near collapse. They also didn’t need to break out the small print to extract undeserved dollars from you with questionable business practices.

Friends, this whole mess was quite a revelation for me. It will also influence the decisions about where my personal business is conducted.

I will be out of the office for most of this week, so we may be a little delayed in answering calls and emails.

Next week, I will have something to say about legislative vetoes and the balance of power in the South Carolina General Assembly. In the meantime, try to keep cool, wear sunscreen, and act in a manner that respects our May River.

Monday, June 8, 2009

Short-term fiscal pain should give way to long-term gain

Bluffton Today

Last Friday I had the pleasure of speaking before the governmental affairs committee of the Hilton Head Island/Bluffton Chamber of Commerce. They are a great bunch of folks who give so much to this community. Much of what we talked about was developments on the economic front and what out prospects are for the short and medium term. We also discussed the stimulus situation, especially how it seems to be gaining a little clarity through the action of the court.

It was nice to see John Van, who happens to be my neighbor, as well as an insurance executive. Also, I had a chat with Tony Guasto from Moss Creek who is in the mortgage business. My message to the Chamber was that from the state perspective, we are in for some near-term challenges, particularly in unemployment and revenue. The longer-term picture is much more positive. I believe we are seeing the low point of this cycle either right now, or very soon, to be followed by a painfully gradual upturn. Unfortunately, both employment and revenue are trailing indicators, which will begin to look up probably two quarters or so after retail and tourism.

One of the friends I was able to chat with at the Chamber event was Tom Upshaw, of Palmetto Electric Cooperative. Tom gently took me to task for a column of a few weeks ago when I was talking about net metering and its importance in the emergence of the green economy. Tom assured me that the Co-op does offer residential net metering and is working on different approaches to commercial net metering. What this means is if you live in the areas serviced by Palmetto Electric, you might start attending those POA meetings and making sure your neighborhood allows solar panels on your roof. If enough of us were making our own electricity and pushing against our electric meters, we might reduce the necessity for more coal fired power plants in our state. It’s just a thought.

I was unable to attend the showing, last Wed., of Greg Smith’s excellent documentary, Keeping the May River Wild, at the Bluffton Library. From all reports, the latest edition is even better than the one I saw a month ago. If you see Greg, encourage him to consider a few more screenings around the area. A modest cash contribution would also help to defray expenses and make more showings a greater possibility.

Friends, this documentary is an excellent recitation of the causes of our current problems with our waters. My greatest concern in this is that we, as a community, will assume that the recent reclassification of the shellfish waters of the May River is irreversible, a done deal. It is not. There are smart people working on this every day, but they need to know, as do their elected superiors, that you, the voters of southern Beaufort County, are expecting a solution to this problem. I believe the willingness is there, it just needs to be constantly reinforced. Greg Smith’s documentary is a vivid reminder to all of us what is at stake.

We are currently out of session, so don’t send mail to my Columbia office. I can most efficiently be reached at Better yet, come by to see me at my office in the Calhoun Street Promenade. The coffee is pretty good and I need to hear what’s on your mind.

Monday, June 1, 2009

Federal Stimulus is a bad idea we must accept

Bluffton Today

I want to thank those who called about last week’s column, and there were around 350 of you. That piece has been run each Memorial Day for the last five years because it receives the same commentary from you each year. We must properly commemorate the sacrifices made by our men and women in uniform to protect our country and preserve those things that make our way of life the envy of much of the world. In truth, I think we need more opportunities to express our gratitude.

I am also grateful that the session is over for a while. Although we have managed to accomplish a few items of the people’s business, on the whole, this session involved much effort that was not reflected in satisfactory outcome. In the next few weeks, I will give you, as is customary, a recitation of the good, the bad, and what might have been.

One thing I can say going in is that the new Senator from Beaufort, Tom Davis, has been a tremendous addition to the Beaufort County delegation. Every good bill that has either originated with our delegation or that we have embraced has been given a proper and appropriate hearing in the Senate due to the efforts of Senator Davis. Not only is Tom a good friend of mine, he is an effective advocate for the best interests of those we have the honor of representing.

One of the items we you have been asking me about is what is going on with the governor and the stimulus money, and why does it appear that the state is suing itself over a rather arcane distinction in constitutional law? The answer is somewhat complicated, not very pretty, and appears to most folks to be more about egos and prerogatives than the best way to get us through this economic rough patch.

I want to be clear up front: I was not a supporter of the stimulus package or the underlying economic philosophy from which it flowed. However, when it became the law of the land, my reservations had to be put aside. My brand of conservatism has a long history that runs from Edmund Burke, through Barry Goldwater, and reached full flower under Ronald Reagan. Embedded in the idea of smaller and less intrusive government is a wide streak of practical wisdom that deems ideological purity to be less important than providing for the general welfare and the economic survival of the governed.

For reasons that are only now starting to become clear, much of the global economy began to collapse toward the end of last year. Our state has suffered significant dislocation because of these events, and our state revenues have reflected the generalized decline. The governor, for his own reasons, preferred to refuse federal stimulus dollars and has used various stratagems to effect his will.

While his reasons may make ideological sense, your representative cannot, in good conscience, lay off teachers, prison guards, state troopers and dismantle the regulatory regime of the state in the name of ideological purity. In addition, even if we don’t take the federal stimulus funds, we are still on the hook to pay it back, leaving us relatively poorer than our neighbors and just as deeply in debt.

Our current budget is only 1.5% higher than it was nine years ago. Most state agencies have absorbed 20% cuts and are on notice that if the economy doesn’t improve in two years at the end of the stimulus, they need contingencies for at least another 20% cut.

My sense is that the courts will support our pragmatic conservative approach. If not, our economic hole will find a new bottom.