FREE ESSAY ON "STATE GOVERNMENT & ECONOMIC PERFORMANCE"

"STATE GOVERNMENT & ECONOMIC PERFORMANCE"

those need for me the best. 
State of the State
In this paper we are asked to read the text by Dr. Paul Brace, "State Government &
Economic Performance," from that we are to decide as if we were the governor of the state
of Kansas, which economic development strategy would be best for Kansas. Out of the four
choices we were given, Arizona, Texas, Michigan, New York, I have chosen to argue for the
example of Michigan. Before I go into great detail of the particular example I have
chosen, let me give you a brief description of the governmental economic strategies of
each state.
Arizona:
Arizona's economy started out with great funding from the government and also from it's
abundance of natural resources. With the growing number of people moving to the new hot
bed of economy, Arizona officials began to take more of a Laissez Faire approach to
government. With WWI and eventually WWII, Arizona received several governmental contracts
to build ships, planes and new military bases due to Arizona's natural closeness to the
pacific campaign. 
Not long after that Arizona's economy started record numbers of economic increase, due
vastly to the tax breaks and other incentives used to bring big business to the area.
Large manufacturing, technology and automobile companies looked to relocate to the
booming state. This change in opportunities left the natural resources industry in
Arizona a distant memory of importance. With big business booming, who needed the small
time industry that carried them from its creation to where they were just after WWI. On
top of that, governmental procedure had to go along with this change. After all with
every action there is a equal and just as great reaction that occurs. With the hands off
approach the government had implemented there were also cut backs! Lower spending on
education being the biggest one. If they cut taxes, were are they going to find the money
to fund the schools that are going to be needed to support the vastly growing population
that would come with these businesses. And that's no even mentioning anything about the
several other governmental agencies that would be effected by the lack of revenue to the
state. These changes, that made Arizona the hot bed that it was, would ultimately be the
same thing that would cause they downfall of the economic resurgence for Arizona.
Soon after businesses stopped coming. They claimed that because of the lack of schooling
available in major programs, particularly engineering, it had became increasingly hard to
find the engineers that were needed to run these plants and sustain profit.
Ultimately, Arizona's economic future according to brace, depends on two factors. As long
as conditions elsewhere stimulate migration to the state, and as long as Arizona retains
a relatively low cost of living compared to other states, Arizona can grow. But it is
overwhelmingly convincing that Arizona's entire economy it based and virtually dependent
on help from other states as well as a need for government intervention.
Texas:
Texas like many other southern states relied heavily on slavery and it's institution of
such, to help stimulate it's economy through the manufacturing of cotton and other
harvest "cash crops". Prior to the civil war, Texas was among the biggest slaves states
in the union. Shortly after the Civil War, Emancipation left them with an abundance of
under skilled, in a educational sense, workers seeking jobs in a already economic
hardship stricken industry. This was due mainly to the lack of incentives in the South to
invest in education which would lead to the training of jobs for manufacturing type
industry. The South still was going to rely heavily on its agriculture bases economy and
at the time had no need nor desire to change. Economically speaking, the supply side of
the economy was well fed but the demand side was undernourished. 
Shortly after the discovery of oil on Spindletop, Texas began a run on one of the most
flourishing economies in the union. Oil and gas would become the big industry in Texas,
and governmental regulations on oil would soon be the only real source of governmental
influence to be had in a politically week state. With large Tax breaks at the federal
level, including the percentage of depletion allowance and the provision for expensing of
allowable drilling cost, helped to stimulate the industry's growth.
Shortly after WWI Texas like Arizona would receive several defense contracts as well as,
military installments which would lead to the beginning of a relocation of big business
to Texas. Eventually with the Cold War and the space race, the emergence of aerospace and
electronic firms would lead to even bigger economic growth. The competitive nature of
Americans and the federal government would begin pushing the space race to such highs
that companies like Texas Instrument and many others would emerge. 
Even more so, when economic crisis hit the country, and gas prices skyrocketed, Texas cam
out smelling like a rose due to the overwhelming resources at it's disposal.
Inparticularlly in 1973 with the Arab oil Embargo, Texas's oil supply helped to bring
down oil prices and supply oil for much of the Untied States. Texas seeming with its
hands off governmental approach had no worries. 
However, even with no state income tax, and virtually no other real major taxes on it's
citizens, Texas was able to support it's public programs through taxes on oil and other
governmental defense contracts. But a week government would lead to major impediments to
Texas's broad based public programs including education. Education was still low, at one
time as low as 31st in the country. With fewer quality schools and more people coming to
such a hot bed of economic prosperity, educational statistics would continue to drop
until courts forced the spending of money's on education in 1988.
Unlike Arizona, Texas has not yet seen it's major crisis in economic prosperity, however,
its hands off approach still seems to depend greatly on the needs of others and help from
the national government. Perhaps without the vast oil resources at it's disposal, our
findings on Texas's economic prosperity would be different. If forced to rely on another
tool to stimulate economy, Texas might be forced into a more hands on approach.
Michigan:
Michigan is different then any of the other two states in that it employs a very hands on
and supportive government. Michigan is among the highest in the country in Education, it
supports greatly the idea of public welfare through public assistance, and also
innovative ideologies in raising taxes to support itself with out asking for the
assistance or having "big brother step in and give them a hand." 
In the early 19th century wood and timber as well as chemicals were the leading
manufacturing products of Michigan. Michigan, a very big user of it's natural resources
as well as new innovative ways of marketing existing resources, has always been among the
leaders in industry in the nation. However, just like several other states Michigan has
seen its days too. During war time, it was also used to help manufacture tanks and other
war machines and weapons. But automobiles have been the major cash crop so to speak for
Michigan since the turn of the 20th century. 
The major differences between the Michigan and the other two is styles of government are
that Michigan, as I stated before, is a very hands on and helpful. Government seeks to
aide it's citizens through programs and other governmental subsides. But the people only
see the now and not the long term effects of raising taxes. They don't see that the goal
is to stimulate growth and to continue to fund government agencies that are there to help
everyone who needs it. The creation of committees to figure out a solution and trying to
do it with out the advatanges that other states have is what makes there style so unique
. 
I think the thing that impresses me most about this style of government is that, rather
than issuing tax breaks, to existing businesses, they would prefer to find new
innovations and new businesses to take the place of those wanting to leave.
New York:
New York like Michigan, is a very hands on style of government. The government for much
of the 19th century and the later of the 20th century was highly involved in all aspects
of economic growth for the state. Early on government used everything in its power to
sustain economic growth for the state, ranging from tax breaks, to low interest rate
loans to even grants and subsides to boost the creation of jobs and business for New
York.
But government got too powerful and took a step back until after the crash in 1929, and
the Great Depression. After 1929, government came on strong. Now that government was
going to take complete control of things ,the economy was going to emerge from the abyss
it was in. Tax breaks for urban jobs, loans for businesses that would open in urban areas
were implemented. But instead of things getting better, in 1950 they got worse. Perhaps
too much government again. Some critics would argue that was the case.
But in the long run the state would intervene again. This time with new leadership,
different goals and a better plan of attack. State government thought that more jobs
paying better money would do the trick and stimulate growth from with in. They thought if
the could find in-state fix's that it would revitalize the economy and in affect would
serve as a jump start. Grants, loans, lower prices on natural resources(like power) would
create a fix. But ultimately stronger heads would prevail creating a surplus in goods and
labor. Unemployment programs as well as, job relocation programs, workman's compensation,
better education and training programs would aide in helping people get better jobs as
well as attacking the need for new business's.
New York like Michigan, also held high value you in education, labor unions and good
working conditions, but I think in this case the government interfered too much and may
have caused more problems than it fixed. To use an example, if your a baseball coach,
your goal is to teach your team to win on there own. The coach has to rely on the team to
play. The coach only instructs the team, but it is the team that decides ultimately
whether or not they win the game. The state government should in place the tools for
growth, but should not try to control the economy to the extent of confusion and over
reliance of government. After all to many hands in the pot only make a mess. 
Now back to the purpose of the paper. If were governor of Kansas, I would choose the
economic strategy of Michigan. The reason I would do so is because It fits me personality
the best . I'm a very hands on type leader. I like to have direct control over
everything, so that if something goes wrong I have one person to blame. Like Michigan
Kansas already has high investment rates in education. And as governor I would seek to
keep it high. Kansas also makes use of governmental subsides to aide the citizens of the
state through relief, welfare, unemployment, grants for school, subsidized loans for
housing and some forms of tax relief for small businesses. Some of our manufactured goods
are the same in that the we both have timber industries. Granted we do have some oil
industry in the state, its not anything close to the security that Alaska and Texas
enjoy, but Kansas relies highly on its agricultural base and insurance to provide for
most of its economy. I still think that Kansas would prosper better with a hands on
government due to the amounts of farms and subsides that are involved in a agriculture
rich state. Without these programs surely Kansas's economy would not prosper due to so
many people's income riding on our wheat crop as well as soy beans and other cash crops.
We can rely on others to buy our goods but drout could cause us to have no crops which
would be a devastating blow to our economy, and may force it to plummet.
In conclusion, the economic strategy of Michigan in my opinion best fits Kansas due to
our agriculture rich economy and our high goals for education through out the state.
Labor safe environments as well as, workers rights and the well being of my citizens
would be the primary concern for me as a governor, and the Michigan plans meets