Category Archives: Georgia

How would Bill Ackman’s “shut ’em down” approach impact Georgia?

Bill Ackman appeared on CNBC two nights ago where he recommend that the United States go on a 30-day lock down in order to combat the Corona virus.  Mr Ackman is chief executive officer of Pershing Square Capital, an investment firm with billions of dollars under management.

CNBC is a business channel, but Mr Ackman was able to share that the source for his policy recommendation stemmed from an emotional place, in this case how Mr Ackman is dealing with the poor health of his father. Mr Ackman argues that the primary tactic for dealing with the virus is to kill it and that killing it means that everyone go into quarantine and spend time with loved ones for 30 days.  Hopefully this period away from work and other social contact would deprive the virus of its ability to spread with the warmer months eradicating the remnants of this virulent and deadly strain.

Mr Ackman’s argument doesn’t sound implausible given what we know about how the virus spreads.  Going around looking like bandits while giving each other elbow taps may aid in reducing the virus’ spread, but in the end, sick people staying away from well people may be the better of the tactics.

But just as CNBC is a business channel, this blog is a political channel so we come to the question of politics.  What would be the political impact on Georgia from shutting down a chunk of the American economy for 30-days in order to fight and kill a virus?  Would there be any increase in political power and capital for elected federal, state, and local officials from such a move?

As with any policy, it depends on how you manage the cons.

What is at risk economically in Georgia due to COVID-19?

Here are a couple examples of industries at risk in Georgia due to COVID-19.  The film industry has a growing influence on Georgia’s economy.  It is estimated that the industry spent $2.9 billion toward hotel, travel, film crews, catering, props, and equipment.  According to the Georgia Department of Economic Development, Georgia exported $10.8 billion of aerospace product and services.  In addition, the aerospace industry has a $57.5 billion overall impact on Georgia’s economy.

As a young management analyst with the Georgia Department of Audits in the 1980s, I saw first hand how important Georgia’s agricultural industry is to the state when I conducted an analysis of the state’s poultry labs.  Today, agriculture is still the state’s leading industry with an estimated annual impact of $75 billion.  In addition, poultry farmers raise 1.3 billion chickens a year and put 9.3 million acres of farmland into production.

Approximately 270,000 workers are employed in Georgia’s advanced manufacturing industry, an industry producing $61.1 billion in output for Georgia.

Conclusion: So far, I see no backlash to the State’s “no shutdown” decision

Since 28 February 2020, Georgia governor Brian Kemp has issued six executive orders addressing the COVID-19 outbreak.  None, at the time of this writing, have ordered a shutdown of the state’s businesses.   Georgia’s active workforce dwarfs the 555 confirmed cases and 20 deaths in the state so far.  Given no shutdown has been ordered by the state, it has been left up to local governments to issue rules on business closures.  Reportedly, Governor Brian Kemp is heeding advice from experts to avoid a shutdown at this time.

Admittedly it is too early to tell the extent of any current damage to these industries.  If Georgia businesses go from voluntary compliance with recommendations of social distancing to a statewide shutdown of businesses, it is at that time that we should see some concrete impact on the state’s economy.  At that point, the question will be, for how long and after that period, the next question will be how much of Georgia’s economy do we have left?

 

 

 

 

Government, on the other hand, is serious business…

State government as corporate body ….

State government is the result of the morphing of colonial stock companies and trading posts.  What does state government do?  In the simplest of terms, state governments in the United States:

  • Sell protection services; i.e. family welfare programs, state militia and state police services, and transportation services.
  • Finance themselves via tax collection and fees for the aforementioned services.
  • Provide the aforementioned services via its own staff or through private contracts.
  • Act as brand managers where regulatory agencies describe and implement the philosophy and policies that guide how protection services are to be delivered.
  • Continuously validate the right to tax and govern the populace by keeping their promises to deliver these services.

Competing for the right to manage the franchise …

Political factions compete for the right to describe and implement the philosophy and policies that guide how protection services are to be delivered.  Think of them as management companies that, through their own internal mechanisms, choose the potential managers that appear on your ballot during an election.

Democracy allows the individual citizen to participate in the selection process.  Voters must suffer the silliness of the campaign season, where the management companies seek to persuade the voter that a particular faction should be allowed to provide the state’s protection services.

Maryland is to Nike as Georgia is to Asics …

Nike and Asics are brands that compete on the tangibles and the intangibles.  How are their shoes priced? How do their shoes look on your feet? How do their shoes enhance your performance on the field or the court?  Most times the decision comes down to the intangibles, down to how the shoes make you feel emotionally.

You can probably say the same thing for an airline.  Should I fly Delta or get on Southwest?  Southwest may win on price, but do they connect to as many destinations as Delta?  Is customer service more important to me than consistent on-time arrivals?

In a mobile nation as the United States, a state’s management company, the ruling faction, must keep in mind the brand messaging for its state. It has to be more than how well parties compete with each other in the silly season of political campaigns.  A Georgia citizen may appreciate the terrain, topography, and climate of the Peach State.  It may even appreciate the diversity of the citizenry; that the state is accepting of all peoples, religions, personal views.

But if the price of living in Georgia i.e. taxes paid and other costs of living are not exceeded by the benefits i.e. the protection services a state is supposed to provide, then that citizen may find herself heading to Maryland or Florida.  It goes to the adage that once you win the office you find governing to be a different animal.

Conclusion: Political parties should be prepared to be government brand managers …

When the silliness of the campaign is over, the real work begins.  Government is serious business.  The hand shaking and rhetoric on the campaign trail has to be translated into service delivery that gets your management company another four-year contract.