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4 The Perquimans Weekly, May 28, 2003 NC SPIN Tom Campbell Easley should veto phone deregulation I challenge you to show an industry that has been de-regulated that resulted in the indus try, individual businesses, the customers, and employees being better off than before de regulation. Don’t even think of suggesting truck ing/common carriers, airlines, telephones, or broadcasting. Power companies are such an entanglement that nobody really wants to tackle them and the jury is still out regarding banking. So when our legislature proposes a bill that is purported to deregulate a public monopoly and improve competition we should bring a healthy skepticism and lots of input into the discussion and debate on the bill. But such has not been the case with the bill sponsored by the three big phone companies that, among other things, pro hibits the State Utilities Commission from set ting rates based on the company’s profitability. This legislation is worrisome for three rea sons. First, the speed with which this bill sailed through both houses of the legislature causes concerns. Phone companies are big contributors to political campaigns and wield great influence with lawmakers. That fact should cause legisla tors to proceed cautiously and publicly to avoid the appearance they are unduly influenced by phone companies. This bill was greased on a fast track from the get-go. Second, it lessens the authority of the State Utilities Commission. This body has served us well in times past and has ensured that regulated monopolies were guaranteed reasonable profits while also making sure consumers received good service. Utility regulation is complicated and deserves full deliberation. This bill will tie the hands of regulators to a large extent. If that is desirable let us know w;hy no one, other than the phone companies want it that way. We know that Commissioner Bobby Owens has been outspoken in opposition to this bill. Owens has more information than do we (or most of the legislators voting on the measure). We should heed his warnings and go slow. The third and most compelling argument is that nobody, with the possible exception of the phone companies, really knows what this bill does. It is possible that critics are right in saying it is anti-consumer and anti-rural. It is also pos sible it will create more competition and lower prices. Maybe it is sound. Maybe not. Common sense says “When in doubt, don’t.” We want our phone companies to be strong and competitive, but we also want to make sure the public is well served. Governor Easley should veto this legislation with the instruction that we start over with full disclosure and open debate. That way everyone benefits. Tom Campbell is former assistant State Treasurer and creator of NC SPIN which airs weekly statewide on twenty television stations. Contact him at www.ncspn.com Letter to the editor policy The Perquimans Weekly weclomes the opin ions of its readers. Letters should be limited to 300 words and should include the name, address and telephone number of the writer. Letters without signatures or telephone numbers will not be printed. Only the name and city of resi dence will be published with the letter. The subject matter should be of interest to the community, not a personal gripe. Letters may be edited .for clarity and space limitations. Submit your letters to The Perquimans Weekly, P.O. Box 277, Hertford, N.C. 27944, or drop them off at our office at 199 W Grubb Street. Call 426-5728 for more information. The Perquimans Weekly Established 1932 119 W. Grubb St., P.O. Box 277, Hertford, N.C. 27944 42&-5728 Susan R. Harris, Editor & Publisher Bev Alexander, Advertising Representative Tina Ennis, Administrative Assistant The Perquimans Weekly (USPS 428-080) is published each Thursday by The Daily Advance, 216 S. Poindexter St., Elizabeth City, N.C. 27909. Subscription rates are $24.20 per year in-state, $26,40 per year out-of-state, single copy rate 35 cents. Second class postage paid in Hertford, N.C. 27944. POSTMASTER: Send address changes to P.O. Box 277, Hertford, N.C. 27944. Deflation: welcome or not? T here's a new word being added to our economic lingo, and it's deflation. Deflation means most prices are falling, rather than rising. For the fifth time in last 20 months, we experienced deflation in consumer prices in April. And, the Federal Reserve (Alan Greenspan and company) said there's a possibility deflation may become the norm, rather than the exception. In fact, deflation has been occurring for a while for many manufactured products. Prices of comput ers and other high-tech products fall almost every year. Clothing prices have dropped for five years, and car prices, after accounting for incentives and dis counts, have been soft for two years. Prices for services, from plumbing services to doc tor visits, are another mat ter. They have continued to rise, and in recent years, are responsible for keeping the overall measure of price change positive. There are some simple reasons for the difference in price trends between manufactured products and services. YOU DECIDE DR. MIKE WALDEN N.C. Cooperative Extension Manufactured product prices have been pushed down by improved efficien cies and productivity in manufacturing processes and by the globalization of manufacturing. More and more manufac turing companies have overseas factories that sometimes can produce at lower costs. In contrast, services tend to be very labor inten sive, where high-tech processes aren't as much use as on the factory assem bly line. Also, the labor must be used to deliver the service, and this makes foreign pro duction, of many services infeasible. For example, a plumber in India can't fix your leaky faucet, but an Indian facto ry worker could manufac ture the pipes. It's vital to recognize aU deflation is not the same. In fact, we can talk about three kinds of deflation: good deflation, bad defla tion, and “so-so” deflation. Good deflation is the kind caused by improved productivity and efficiency Many manufactured prod ucts can today be made at a fraction of their previous cost as a result of using high-tech machinery and techniques on the factory floor. This kind of deflation is a “win-win.” Factory workers can be paid more because they produce more output per hour, and con sumers are better-off by paying lower prices. Bad deflation results when the economy is weak and prices are falling because consumers aren't buying. The best example is the deflation that occurred during the Great Depression in the 1930s. The weak economy not only leads to falling prices, but also to falling wages and salaries. This kind of deflation is a loser for most people and businesses. “So-so” deflation derives its name because it's associ ated with winners and losers. In recent years, this type of deflation has result ed from foreign competi tors selling more products in the U.S. US; consumers have benefited by paying lower prices for the import ed products. But U.S. work ers and companies compet ing with the foreign pro ducers have often lost by losing market share and jobs. AU three brands of defla tion have affected the U.S. economy in the past decade. Certainly the increased productivity brought about by the techr nological revolution has spread “good deflation” over the U.S. economy, par ticularly during the 1990s. : But in NorthCarolina; the textile and apparel industries have been direct ly ciffected by “so-so defla tion.” And, during the recession and economic slowdown of the past three years, “bad deflation” has also been at work. Although at first glance, deflation may sound good, this is not always the case. Deflation comes in differ ent flavors, and the taste of the flavor will color our decision to welcome or resist deflation. Walden is a William Neal Reynolds Distinguished Professor in the Department of Agricultural and Resource Economics who teaches and writes on per sonal finance, economic out-, look, and public policy. 'N\ > ■Ifei V CldSS^2003 3M^0Uf ©2003. CAROUNA HOME-rouN Edwards: President or Senator? H ow are w e going to keep our U.S. Senate seat if John Edwards won't decide what he is going to do? You would hear this ques tion being mut tered if you ’ were listening to some North Carolina Democratic Party regulars. Here is why they are worried. They think that if Edwards waits until late this year or early next year to decide whether he is run ning for President or the U.S. Senate, or both, it may make it impossible to beat the presumptive Republican senate candi date, Congressman Richard Burr. If Edwards only then decides not to run for the Senate, they say, it wiU be too late for another Democratic candidate to mount a strong campaign. What gaUs some of them is their belief that other Democrats, like last year's Senate candidate Erskine Bowles, would stand a bet ter chance of beating Burr than Edwards would. Edwards, they believe, has torpedoed his chances with D.G. Martin moderate North Carolina swing vot ers by his appeal to the more liberal Democratic voters whose sup port is nec essary to win presidential primaries in other states. Bowles, they think, could stiU hold on to sub stantial political and finan cial support from enough business leaders and mod erates to compete with Burr. But, they say, until there is a Democratic alter native like Bowles, Burr will have a free hand sign ing up support (and money) from such people. Six months from now, they say, it will be too late for anoth er Democratic candidate. AU this makes sense. But there is another side to the story. It is this. John Edwards' best chance to retain his senate seat is by running for President. Why? Money and public- ity-the two most important assets for a senate candi date these days, and the hardest to come by. On the money side, even a senator as wealthy as John Edwards cannot afford to pay the enormous cost of a reelection cam paign by himself. But fund raising is a tough business. Most Democratic senate candidates can look for sub stantial help from a group of moderate and liberal political action committees (PACs). But not John Edwards. He has promised never to accept contribu tions from PACs. Therefore, even if he secured generous financial support from individuals in North Carolina, it might not be enough to compete with a well-financed Republican candidate like Burr. To raise enough money for another senate cam paign without PAC help, Edwards needed to foUow the example of former Senator Jesse Helms by building a broad based group of national financial supporters. With very impressive early fundraising success in his presidential cam paign, Edwards is on his way to achieving this goal. Of course, not aU of his presidential contributors wUl help again in a senate race. But many wUl, and some will help over and over again. In the meantime, their money is paying for an up- and-running Edwards orga nization that can be con verted to the senate cam-^ i paign whqn he gives the word. Then, there is the public ity. An ordinary first-term senator has a hard time, keeping his name before; the public at home. Edwards' presidential , campaign, however, gets I his name on the front page of every North Carolina newspaper almost every day, it seems. In a very short time he has buUt a: bank of name recognition that every other politician would envy. So, the next time you run into a loyal Democrat who insists that Edwards is “risking” a Senate seat by running for President, just remember these two words^ money and publicity. They are the most criti cal assets for a senate cam paign, and Edwards is putting them in the bank every day. D.G. Martin hosts UNO- TV’s North Carolina | Bookwatch, which airs l Sundays at 5 p.m. This week’s (June 8) guest is Dr Mel Levine, author of New- York Times best seller, “A Mind at a Time. ” \
The Perquimans Weekly (Hertford, N.C.)
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May 28, 2003, edition 1
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