EDCUtah investors and friends joined in a lively conversation with Congressman Jim Matheson last week during the Quarterly Investor Update meeting at the Utah Opera Production Studios in Salt Lake City.
Matheson described his thoughts on public policy and its impact on the economy, explaining that he believes the federal government’s decisions can have a significant impact on the economy. Separating the real news out of Washington from the spin is difficult, he said, as a lot of the information tends to focus on challenges and problems, giving the perception that things aren’t so great in the Beltway. “I actually believe things look really great,” he countered. “The country has faced challenges for over 200 years, but 50 or 100 years ago you didn’t have 24/7 communication highlighting every crisis of the moment.” Challenges, he added, are natural in a democratic society.
Still, Matheson said there are some remarkable things going on in the country, particularly with technology and innovation. For example, he said it is remarkable to think in the next few years the United States could be a significant exporter of oil and natural gas. “Who would have thought that five years ago?” he noted. “And the whole fertilizer industry, which left the U.S. a few years ago, is coming back.”
Speaking broadly about the direction he sees the United States going economically over the next 10 to 15 years, he noted the three key public policy issues–the tax code, immigration reform and open trade agreements–that could make a difference in economic growth. “These are areas where, if we take appropriate action, we will create huge economic growth and opportunities,” he added.
Updating the tax code “to reflect the realities of a 21st century economy,” is an urgent need, he explained. The current tax code is 28 years old and hasn’t been updated since 1986. “We are so far behind the rest of the world in our levels of taxation and structure, it is hurting us in terms of being competitive with the rest of the world,” he noted. “Overhauling the tax code will be complicated. It will be a lobbyist’s dream in terms of the special interests coming out of the woodwork, and it opens a whole can of worms.”
Immigration reform, he said, is also critical. “Every day we do not do immigration reform in this country is a day we hurt our economy,” he continued. “This issue is not going away.” He described the Senate’s passing of a bipartisan immigration reform bill as good news, but not perfect, adding that the cap on visas for construction workers was too low. Nevertheless, he said the House of Representatives doesn’t appear inclined to do something about immigration reform, as ultra-conservatives shot down House Speaker John Boehner’s immigration reform talking points. Despite the polarization in Washington, Matheson said outside the Beltway there is a wide range of interests that want to see immigration reform happen–every sector of the economy–and added that passage of the Senate immigration reform bill would have boosted gross domestic product (GDP) growth “by a significant amount” and also would have reduced the federal deficit.
The third critical public policy area, Matheson described, is the value of open trade agreements, which he said are “a challenge for the country right now.” Globalization creates opportunities and challenges, but open trade agreements create opportunities for every country to realize benefits. The reason trade must be talked about right now, he said, is because two major trade agreements are being negotiated, and the United States needs to get on board or get left behind. One trade agreement is the Transatlantic Trade and Investment Partnership, which covers all of the European countries, and the other is the Trans-Pacific Partnership, which covers the U.S. and many countries in Asia.
“When you take those two agreements together, they cover the vast majority of global GDP,” he said. “Does the U.S. want to be part of these partnerships? A lot of people think if you don’t like trade you can still maintain the status quo. That is a naïve and incorrect assumption.” Matheson noted that Congress has not given President Obama the authority to negotiate trade agreements, which is typically done through a mechanism called Trade Promotion Authority. Under this mechanism, the President has the authority to negotiate the agreements and Congress must vote up or down on the agreements.
Matheson also fielded audience questions regarding protection of the electrical grid, energy independence and the challenges faced in Utah’s coal country, public lands issues, the implied regulatory powers of President Obama regarding executive orders and the telecom act.
The conversation with Matheson was followed by an introduction to Utah Opera and the organization’s production studios, where the Quarterly Investor meeting was held. Utah Opera Creative Director Christopher McBeth described the impact of the Utah Symphony and Opera (USUO) on the Utah economy. Noting the arts organization employs 450 full and part time individuals and about 90 percent of its expenditures are returned to the state’s economy. He was followed by Utah Opera Resident Artist Amy Owens, who performed Leonard Bernstein’s upbeat “Glitter and be Gay.”
EDCUtah President and CEO Jeff Edwards then welcomed 21 businesses and organizations as new EDCUtah investors. They are:
3 Squares Inc.
Office Furniture Solutions
City of Orem
Roger Knight Construction
Kimley – Horn and Associates
GBS Benefits, Inc.
BNFS Railway Company
Cresa Salt Lake City
Holland & Hart, LLP
Afterward, COO Todd Brightwell described his recent trip to Taiwan with leaders from the Governor’s Office of Economic Development and Ogden City. The entourage met with executives from the bicycle manufacturing industry in Taiwan and plans are under way to introduce another, even larger contingency of Asian bicycle industry executives to the Beehive State in September.
Brightwell also noted EDCUtah’s project activity and said the organization neared a record in February for the number of new economic development projects added to the pipeline in one month. Meanwhile, the number of high-value projects are increasing. Three different projects involve billion-dollar capital investments. “We haven’t had that in the past. This is a great opportunity for us, and we are leveraging all of our partners. The more we learn about how to respond to these big projects gives us more horsepower to apply to the other projects we have in our pipeline,” he said.