Three ‘curses’ visited Virginia in 2010
- November 29, 2010
“May you live in interesting times.” That phrase of uncertain origins is referred to as the Chinese curse. In fact, it is purported to be the first of an escalating series of three curses. The second is “May you come to the attention of people in authority,” followed by “May you find what you are looking for.”
As 2010 draws to a close, it is fair to say Virginia’s business community has been visited in varying degrees by each of these sentiments.
We definitely live in interesting times. Early in the year, many of us had a sense of optimism born out of feelings that business could only get better after the economic turmoil of 2009. For the most part, this has been true. Revenue and profits are recovering, just not quite as fast as we might like. This year has been a bumpy ride, but on the whole things are showing improvement.
Business also has most certainly come to the attention of people in authority. Government intervention in the economy and in business affairs is the new order. This has ranged from stimulus spending, which may have had positive short-term effects, to increased regulation, which generally tends to raise the cost of doing business.
In Virginia, federal spending creates what might best be termed “philosophical conflicts of interest.” For example, it is hard to complain about excessive federal expenditures when some of that spending fuels Northern Virginia and Hampton Roads, the twin engines of Virginia’s above-average economy.
In economic development, the commonwealth definitely has found many of the things it was looking for. Its big wins this year included landing Northrop Grumman’s corporate headquarters in Fairfax County and a Microsoft data center in Mecklenburg County. In addition, completion of the Heartland Corridor rail project from Virginia to the Midwest will greatly benefit Norfolk-based Norfolk Southern Corp. and the Port of Virginia.
Not everything, of course, turned out as planned. The Ignite Institute, an ambitious biotech center planned for Fairfax, actually failed to ignite because of lack of financing.
The state government also found some solutions to daunting problems it faced this year. The General Assembly began 2010 with a new administration and the task of cutting $4.2 billion from the state budget. Our state constitution requires a balanced budget. That mission was accomplished, but not without leaving transportation and other vital needs significantly underfunded.
We await results from Gov. Bob McDonnell’s efficiency task force, but make no mistake, reducing other government spending to zero would still not produce enough to cover our transportation needs. In fact eliminating all spending for public safety, general government and other agencies would produce savings equivalent to only slightly more than half of what Virginia currently spends on its transportation needs.
As 2010 draws to a close, business in Virginia is getting better. Gone are the large bankruptcies of 2009, such as LandAmerica and Circuit City. We’ve started to see some recovery in the real estate market, most notably in Northern Virginia. Businesses have pared costs to a level that any uptick in sales shows up dramatically on the bottom line, especially against the year-over-year comparisons to weak results from 2009.
Looking forward, it probably is wise to be careful about what we hope for. Here are a few things on our wish list:
Increased economic stability. Even if slow recovery remains the order of the day, we’d rather see steady growth than the seesaw effects of the past 12 months.
Meaningful progress by the General Assembly. The 2011 session is likely to be dominated by partisan battles over the state budget and redistricting. We’d prefer to see greater statesmanship and meaningful progress on transportation.
Continued progress on economic development. Virginia’s business climate has much to offer, but we need to be more competitive, offering incentives to new businesses and developing mega-sites to attract more job-heavy prospects, such as manufacturers. We’ve done well at gaining corporate headquarters; now it’s time to put more people back to work.
With a little good luck, perhaps our curses will turn out to be blessings.