Wednesday, December 21, 2011

Obama's top economic adviser sees 'make or break moment for middle class'

Alan Krueger, chairman of President Obama's Council of Economic Advisers, gave his first speech as chairman Wednesday in Charlotte. Addressing a World Affairs Council of Charlotte luncheon, Krueger spoke on "Finding Economic Certainty in an Uncertain World." After the speech, he took questions from the media, including yours truly, in a hallway of The Westin hotel uptown.

Here's a transcript of that Q&A session:

Q: How do you think the speech went?

Krueger: Well, for me, it was a great opportunity to come to Charlotte. It's the first time I've made an official trip outside of Washington, in my position. I had a message I wanted to deliver because we're at a particularly important moment in the U.S. This is a make-or-break moment for the middle class. I think we need to build on the strengths that have made this such a great country. I think we have an opportunity to do that. I think this gave me a chance to say where the economy is now, but also take a step back and say if we make wise decisions, we can build a brighter future based on historical strengths of the U.S.

Q: Do you think your speech was too political?

Krueger: The president when he nominated me for this position said he counts on the chairman of the Council of Economic Advisers to provide him unvarnished advice about the state of the U.S. economy and how to strengthen it and create more jobs in the future, and that's what I tried to do in my remarks.

Q: Several CEOs in this town said earlier this week that there's not an atmosphere out there that makes them want to hire. How do you change that? How do you build up the confidence again?

Krueger: Well, there's a mixture of problems we face in the U.S. I think the top problem we have is a direct result of the recession, financial crisis that we had. American families overborrowed during the 2000s, and now they're paying down debt. State and local governments are struggling, and the residential construction industry is having trouble. The fundamental problem is weak demand. The president proposed extending the payroll tax cut to give families more after-tax income so they can go out and buy essentials, pay their mortgage and reduce the number of foreclosures that way, pay the rent to help support the economy that way.

He also proposed maintaining the extension of unemployment benefits, which the Congressional Budget Office has concluded provides the biggest bang for the buck in terms of creating jobs and strengthening economic growth more generally. But there's a whole suite of things I mentioned in the speech that the administration has been doing, like the look-back exercise to look at regulations that might be unnecessary.

Fundamentally, I think strengthening demand in the economy so people go out and buy the goods and services that the country is capable of producing, that companies can produce, is what we need to do. I think we've seen beneficial effects from the payroll tax cut over the last year. It helped households cope with rising gas prices because of turmoil in the Middle East and helped to sustain the recovery. It's important to keep that going in the future.

Q: Can you explain perceived uncertainty?

Krueger: Well, my point in the speech is that we live with uncertainty. That's the nature of economic life. What we can try to do as individuals is to minimize the effects of uncertainty such as having a diversified portfolio in our economic investments. As a country, we can reduce the effects of uncertainty through programs such as Social Security, unemployment insurance, the FDIC, which protects bank depositors, smart regulation like the Wall Street Reform Act.

There are ways we can reduce the uncertainty in the economy. We shouldn't allow uncertainty to paralyze us from action. We can take steps to strengthen the economy. I think a very big step, a very helpful one, would be to extend the payroll tax cut. If we don't extend the tax cut, the typical American family will see a $1,000 tax increase starting with their next paycheck in January.

Q: Some small businesses complain about too much regulation. How do you balance that?

Krueger: If you look at some surveys, the number one concern that businesses list is that they don't have enough customers. I think that relates to the issue of inadequate aggregate demand for the U.S. economy. The way to address that is to look for ways to strengthen household balance sheets, ways to encourage people to  spend the payroll tax cut responsibly.

We need to have smart regulation in this country. We need to strike a balance. The president has said we need no more regulations than necessary to ensure the safety and health of the American people. I think that's a very sensible approach. We started a process to look at unnecessary regulations, which is unprecedented. But clearly we've also seen the effects of having inadequate regulation in the U.S. The financial regulatory agencies failed during the financial crisis, and we're still digging our way out of the problems from inadequate regulation, so we have to strike a proper balance.

Q: What's your outlook for 2012?

Krueger: The economy is at a point now where it's been expanding for the last two and a half years, but the recovery is not as strong as one would like. The administration makes forecasts twice a year as part of the budget process. The Council of Economic Advisers leads that process, but we're not going to release that forecast until the budget comes out, so I'm not going to be more precise.

But if you look at private forecasters, you see the expectation that the economy will continue to expand, but it's capable of expanding more quickly if we pursue policies that will support demand such as by maintaining the payroll tax cut and extending unemployment benefits.

Q: What are the prospects for getting a deal on the payroll tax cut?

Krueger: I don't comment on the politics. My job is to advise the president on the best economic policies to pursue to strengthen the recovery, to create more jobs, to improve the fiscal situation of the United States. I leave it to others to handicap the politics.

Q: What do you tell President Obama when you're alone with him? Is it all economic theory? Things are tough out there. What do you tell him?

Krueger: There's no question that the country is going through a difficult period. The recession that began at the end of 2007 is the worst recession we've had in the post-war period. The president is very interested in all ideas. He's very pragmatic, but he's interested in ideas to help strengthen the economy. When he offered me this position, he told me he was offering it so I could provide the best advice about how to strengthen the economic recovery and create more jobs. He's quite pragmatic about what will work and what won't work.

He's also, as you probably noticed, gotten to the point where he can't wait for Congress to act. He's taken a number of steps on his own, such as the announcement last month to help families refinance their mortgages, help for student loans and so on. So this whole process is going on to look for executive actions that the administration can take because as a country we can't wait for Congress to act. We need to take every step we possibly can.

Q: A lot of banks are pushing back about having to hold more capital, that Dodd-Frank will hurt the economy. What do you think of that argument?

Krueger: We have to strike the right balance when it comes to financial and other regulations. I think we are in a stronger position now to weather some of the risk we're facing from sovereign debt issues in Europe because the banks were required to improve their balance sheets and raise additional capital. We have to strike the proper balance in this area.

So, what do you think of Krueger's comments? (Sense a theme on the payroll tax cuts?) Tell me here.

Tuesday, December 20, 2011

Was Nucor CEO right about jobs?

At yesterday's Charlotte Chamber's annual economic outlook conference, Nucor CEO Dan DiMicco created a bit of a stir when he called the idea of a "skills gap" between workers' training and available jobs "complete hogwash."

DiMicco, who left the comfort of his easy chair to address the crowd of businesspeople and politicians, said employers need to create jobs for the skills workers have, moving back to making and building things.

"We are in a crisis," DiMicco told the audience. "There is a path out of this, but nobody in Washington is leading us in that direction."

Other local business leaders have told me there is a significant gap between the high-tech manufacturing jobs they need to fill and the skill set of prospective employees. Who's right? Do you agree with DiMicco's remarks that talk of a "skills gap" is overblown? Why or why not? Tell me here, and I'll print some of the responses in a future blog.

(We interrupt this blog to bring you this pressing question: How 'bout them Cats?! In case you missed it -- and how could you? -- those pesky Davidson Wildcats knocked off the 11th-ranked Kansas Jayhawks last night in a virtual home game for KU. Call it payback of sorts for the 2008 loss in the Elite Eight. Somewhere today, Stephen Curry is smiling and maybe talking smack.)

Airport buys land from UPS

A quick tidbit from my friends at Percival McGuire Commercial Real Estate:

Charlotte Douglas International Airport has purchased 79 acres of vacant land from UPS. The site is between a runway and U.S. 74. Purchase price: $2.5 million. Rush Dunaway and Bob Percival Sr. -- still going strong at 88 -- brokered the deal, which just closed.

The airport has been steadily buying adjoining land for future expansion.

Business is good at Percival McGuire and the airport. How's business for you? Tell me here.

49 jobs for Iredell County

A Goldsboro-based foodservice distributor will open a distribution center in Statesville next year, creating 49 jobs initially.

Pate Dawson Co. will occupy a shell building in Statesville Business Park off U.S. 70. Pate Dawson will expand the 63,000-square-foot building, which was completed in spring 2009, to 95,000 square feet with plans to open next summer. The family-owned company will invest $8.5 million over the next three years in the project, which was made possible in part by a $150,000 grant from the One North Carolina Fund.

Salaries will vary by job function, but the average annual wage for the new jobs will be $47,531 plus benefits. The average annual wage in Iredell County is $36,348, according to a news release from Gov. Bev Perdue's office.

N.C. Department of Commerce Secretary Keith Crisco represented Perdue at today's announcement, dubbed Project Ice Box. (That title was appropriate because it was freezing this morning in the cavernous space.) The building was developed by The Keith Corp. in Charlotte, and the company's Alan Lewis officially handed over the keys to the property to Mac Sullivan, CEO of Pate Dawson.

The new facility will serve Pate Dawson's restaurant customers in western North Carolina and beyond. Sullivan tells me the company looked within a 50-mile radius of Charlotte for a site for the distribution center, which will join similar centers in Goldsboro and Greensboro. Pate Dawson, founded in 1885, employs 390 workers currently.

Asked why he chose Statesville, Sullivan says the city is near a "concentration of customers for us, and it's important for us to reduce our transportation costs. So this is a good fit for that."

He says the company will be looking primarily for warehouse workers and drivers. For more info on Pate Dawson, including job opportunities, go to

I couldn't let him go without asking my trademark question. Here's his response:

"It's interesting. The economy is certainly slow, and you can't say the restaurant industry is growing, but we are growing, so that means we're doing a good job growing our market share."

How's business for you this holiday season? Tell me here.

Friday, December 16, 2011

Not your typical groundbreaking

Say this for Bob Wilhelm and Doug Dawson. They don't mind risking embarrassing themselves in front of a crowd.

Wilhelm, executive director of the Charlotte Research Institute at UNCC, and Dawson, incoming chairman of the Ben Craig Center business incubator, literally broke ground Thursday for the new PORTAL building on campus. Literally, as in manned the earth-moving machinery -- in their business suits -- to mark the official groundbreaking for the building.

Truth be told, they did a passable job playing construction workers, although the sign marking the occasion and sporting a rendering of the building was a casualty of their big dig.

(Dawson, by the way, is a UNCC grad and a serial entrepreneur. His latest venture is WanderPoint, which develops mobile applications for tourism. Learn more at

Even UNCC Chancellor Philip Dubois got into the act, donning a pair of shades on the sunny, windy afternoon and dubbing himself the school's "coolest chancellor." That drew a laugh from his predecessor, Jim Woodward, who was in the audience.

Yes, the dignitaries were out in force for the PORTAL ceremony. PORTAL, by the way, stands for Partnership, Outreach, and Research for Accelerated Learning. The $37 million, 95,000-square-foot project is envisioned as a hub of research and innovation for the region. Among other things, the building will house the Ben Craig Center, which will move from its current location nearby when PORTAL opens in late 2013 or early 2014.

BCC President Paul Wetenhall used the occasion Thursday to single out two Charlotte-area startups that just won grants from NC IDEA: InfoSense ( and mailVU ( Both have ties to the BCC.

InfoSense was founded by a UNCC professor, Ivan Howitt, who has been a client and affiliate of the center for three years. The company uses acoustic technology to help fix sewer pipe blockages and breakages.

MailVU won the BCC's Five Ventures competition this year and received a $10,000 check in April. Now housed in Packard Place uptown, mailVU is a full-featured video platform that allows businesses and individuals to record and distribute video content.

Business is booming for InfoSense and mailVU, thanks to recent cash infusions. How's business for you? 

Some of Charlotte's biggest fans

Garth Moulton is a walking, talking billboard for Charlotte.

That's one of three things I learned at an entrepreneurs networking event at the oh-so-hip Packard Place uptown Wednesday night.

Moulton, who grew up in New England and lived in Silicon Valley for 15 years, moved to Charlotte two years ago. He can't say enough good about the city and the surrounding area. A serial entrepreneur, he is now president and co-founder of OtherScreen, a Charlotte tech startup that's building a companion content platform for social TV. Learn more at

He's probably best known for his role as co-founder of Jigsaw, a crowd-sourced business database that was acquired by last year for $175 million.

The second thing I learned at the event is that everybody in the entrepreneur community -- and I mean everybody -- knows and adores Terry Cox, president and CEO of Business, Innovation & Growth, better known as BIG. The membership nonprofit bills itself as a "safe haven" for entrepreneurs. Cox is also bullish on Charlotte, rattling off a number of local success stories in the past few months. Learn more at

Lastly, I met Bryan Delaney of Skookum Digital Works, who gave me two or three other story ideas. One is how a company can go from the bedroom of an apartment to a 19th-floor office at Trade and Tryon in six years. Delaney is co-founder and VP, sales and marketing for Skookum, which builds custom business software for a number of high-profile corporate clients as well as funded startups across the country.

Skookum, started by college roommates and former Defense Department programmers Delaney and James Hartsell, now boasts 25 employees in addition to that impressive view of Charlotte.

The company's webiste ( calls Charlotte "a ripe investor community with a contagious local entrepreneurial spirit."

So how's business? Pretty good for Moulton, Cox and Delaney. Tell me how you're doing.

My favorite question: How's business?

"How's business?" That's my favorite question and the name of the Observer's newest business blog focused on job growth, manufacturing, entrepreneurs and everything in between.

Yes, that covers a lot of territory, but so do I.

Just this week, I've been to an entrepreneurs networking event at Packard Place uptown, the groundbreaking for the PORTAL building at UNCC and the Charlotte Regional Partnership's holiday party at NASCAR Plaza.

Next week you'll see me at the Charlotte Chamber's Economic Outlook Conference at the convention center featuring a number of local heavy hitters, and the World Affairs Council of Charlotte luncheon at The Westin featuring Alan Krueger, chairman of President Obama's Council of Economic Advisers. And that's just so far.

Earlier, I've been to Westinghouse Boulevard twice for ribbon-cuttings, to Ballantyne, to Mooresville, to Matthews and to Bessemer City, among other places.

In short, if you don't have my business card, you will soon.

What I've heard during my travels is a guarded optimism. Yes, the national economy is still sputtering, and the big banks continue to make headlines for the wrong reasons, but Charlotte remains a thriving business community, if you know where to look. Manufacturing (See: Siemens expansion) and entrepreneurial endeavors are particular areas of growth. Just this week, two Charlotte-area startups, InfoSense and mailVU, won grants of up to $50,000 each from NC IDEA. The not-for-profit organization "targets promising technology companies that need help bridging the gap between initial product

development and venture capital funding." (I'll write more about those companies in future blogs.)

A bit of background about myself, which may help explain the tone and subject matter of this blog.

I grew up in Statesville, graduated from Davidson College with an English degree, worked a year in Chapel Hill for Carolina Blue magazine and then worked seven years in Charlotte as a business journalist with a focus on economic development and commercial real estate. I then took my talents to Cincinnati, where I laid the groundwork for Chiquita's eventual relocation (kidding), then on to D.C., where I ran my first -- and only -- marathon, and finally Huntsville, Ala., for 11 years.

In Huntsville, I worked for the daily newspaper, The Huntsville Times, in a variety of roles, including business editor and copy desk chief. And before you discount my time in Alabama, know that Huntsville is the Rocket City, a key player in the space program and home to all of the nation's largest defense contractors thanks to Redstone Arsenal.

(Whom do I like in the BCS national title game, by the way? Roll Tide, of course.)

I took a buyout from the Times in April 2010 and proceeded to go without full-time work for 18 months, so I know what it's like to be unemployed and wondering where your next paycheck is going to come from. I returned to North Carolina in February and began with the Observer in October, which brings us to the present and this blog.

So tell me, how's business?