Bloomberg News

Geithner Trails Obama to North Carolina Pushing Jobs Bill

October 26, 2011

(Updates with chamber leader’s comments in seventh paragraph.)

Oct. 26 (Bloomberg) -- Treasury Secretary Timothy F. Geithner followed President Barack Obama to North Carolina, praising Corning’s Inc.’s fiber-optics factory as a model of innovation and prodding Congress into jobs bill passage.

The plant tour was “a great reminder of the basic reality that we’re still a country that invents and creates and builds things here, things the world needs,” Geithner said yesterday after watching Corning’s machines in Wilmington spin optical fiber into continuous 50-kilometer-long spools. “It’s also a reminder of the things we need to get the government to do better if we’re going to be stronger as a country.”

Geithner’s visit, after Obama’s bus tour stops in North Carolina last week, underscores the state’s role as a potential swing state in the 2012 election, said Charlie Cook, publisher of the nonpartisan Cook Political Report in Washington.

“I don’t think he’d be doing a fiber-optic plant tour in a solid Democratic or solid Republican state,” Cook said in an interview. “The administration is trying to get its message out, particularly on the economy, which is the first, second, third, fourth and fifth most important issue.”

North Carolina was one of two Southern states -- the other was Virginia -- that swung for Obama in 2008 after decades of voting for Republican presidential candidates. Obama edged Republican rival John McCain by 14,000 votes of almost 4.3 million ballots cast.

Democratic Convention

The Democratic National Committee, hoping to keep North Carolina in Obama’s column, will hold the party’s 2012 convention that will renominate him in Charlotte.

Obama will likely get less support from the state’s business community than he did in 2008, said Connie Majure- Rhett, president and chief executive officer of the Greater Wilmington Chamber of Commerce.

“For North Carolina, things just haven’t gotten better,” she said. “The business community is frustrated. They blame Congress, but they blame the president, too.”

During his visit yesterday, Geithner said Congress has a “critical opportunity” to pass the $60 billion infrastructure portion of Obama’s $447 billion American Jobs Act next week after the overall package was blocked by Senate Republicans.

The Treasury Department said Geithner’s trip was designed to “underscore the importance of investing in our nation’s advanced infrastructure and the value of export promotion for the competitiveness of U.S. businesses.”

Employers cut staff by 22,200 in North Carolina in September, the most in the nation, and unemployment rose a percentage point to 10.5 percent, compared with the U.S. rate of 9.1 percent.

Geithner met in Durham with executives from companies, including International Business Machines Corp. and Progress Energy Inc., before visiting Wilmington, where he toured the plant. The Corning, New York-based company says the facility is the world’s largest producer of fiber optics.

U.S. Unemployment

Nationally, unemployment has exceeded 8 percent since February 2009, the longest stretch of such elevated joblessness since monthly records began in 1948. Through September, the economy had recovered about 2.09 million of the 8.75 million jobs lost as a result of the 18-month recession that ended in June 2009.

In previous economic downturns, North Carolina’s unemployment rate stayed below the national average, said William Hall, an economics professor at the University of North Carolina, Wilmington. This time the state suffered more because real estate and financial services, the industries that grew fastest in the first half of last decade, crashed the hardest, he said.

“We became dependent on those sectors,” Hall said in an interview. If it weren’t for the Obama administration’s stimulus spending since 2009, construction-related contractors in North Carolina “would have very little to do.”

Payroll Reductions

The biggest payroll reductions in the state last month were in the public sector, with 13,700 cuts, and finance, with 3,000, according to the state-run Employment Security Commission of North Carolina. Bank of America Corp., based in Charlotte, said last month it will cut 30,000 jobs from its retail banking operations in the U.S. and internationally.

“North Carolina is ground zero for the kind of economic transformation the national economy is going through,” said Michael Walden, an economics professor at North Carolina State University in Raleigh.

The state’s former big three industries -- tobacco, textiles and furniture -- “are a shadow of their former selves,” ceding ground to technology, health care and tourism, Walden said. The largest employers include Duke University in Durham; Wells Fargo & Co., which bought Charlotte-based Wachovia Corp. in 2008; Bank of America and IBM.

Communicating

As for the political significance of Geithner’s visit to North Carolina, one former George W. Bush administration official said he will give the Treasury secretary the benefit of the doubt.

“Part of the administration’s job is to communicate its strategies to the people,” said Tony Fratto, a former White House and Treasury official who is now a partner at consultant Hamilton Place Strategies in Washington. “At some point those events bleed into an election year. I have a hard time being critical of an administration going out to talk about its policies and programs, or the economy.”

Still, Americans are unlikely to be persuaded by Geithner’s pitch for the jobs plan because they don’t think Obama and Bush policies since the 2008 financial crisis have worked, he said.

“The mood of the American people is that they’re tired of hearing about new plans and programs from Washington,” Fratto said. “They’re very skeptical.”

--Editors: Kevin Costelloe, Gail DeGeorge

To contact the reporter on this story: Ian Katz in Wilmington, North Carolina, at ikatz2@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus