April 21, 2017 News & Press Releases · Press Releases and Announcements

Roanoke Times Editorial: Trump’s budget director doesn’t understand the Appalachian economy

by Katie Baker

KEY QUOTE: "Making America great again apparently doesn’t include rural America."

President Trump’s budget director gave a remarkable interview last week on the CNBC network. It’s remarkable because of what Mick Mulvaney had to say about the decision to eliminate funding for the Appalachian Regional Commission, the federal agency that helps pay for a lot of economic development infrastructure in the region.

Appalachia supported Trump more strongly that almost any other part of the country. That region has been trending Republican for years, but in many counties, Trump ran stronger than any Republican ever. Why would Trump turn around and take away economic development funding from the localities that helped most?

That was exactly the question that interviewer John Harwood posed. To which Mulvaney replied: “My guess is he probably didn’t know what the Appalachian Regional Commission did.”

Then Mulvaney went on: “I think I was able to convince him, Mr. President, this is not an efficient use of the taxpayer dollars. That is not the best way to help the people in West Virginia.” (Or, presumably, anywhere in Appalachia, the official designation of which includes 25 counties and eight cities in Virginia.)

So what is the best way to help those areas? Mulvaney said Trump’s view is: “The best thing I can do for those folks whether or not they voted for me is to figure out how to get 3.5 percent economic growth.”

Let’s examine that statement, because it really shows that Trump’s budget director – and maybe Trump himself – have no clue how to create jobs in Appalachia, or anywhere else in rural America.

First, let’s start with the worthy goal of 3.5 percent economic growth. That is certainly a prerequisite for economic growth in rural America. If the national economy is going poorly, the economy in rural areas will be even worse. But – here’s the key point – does 3.5 percent economic growth nationally guarantee growth in rural areas? Of course not. We only have centuries of history that proves that.

The anguish of rural areas is that economic growth is not evenly distributed. Put bluntly, the rich – in this case, metro areas – get richer, and poor areas, well, some limp along with much slower growth, and some actually get poorer. The whole point of the Appalachian Regional Commission – and a related agency, the Economic Development Administration, which serves rural areas and inner cities nationwide – is to help change that.

Mulvaney and Trump are basically saying to rural areas – hey, you’re on your own, 3.5 percent economic growth will fix all your problems. No, it won’t. It hasn’t before; why would it now when the economy is in transition in ways that specifically disadvantage rural areas?

Let’s look at some specifics. We’ll even quote a Republican congressman – a Freedom Caucus Republican, in fact, that being Rep. Morgan Griffith, R-Salem. Griffith points to Dickenson County, in Virginia’s coalfields. The county is so rugged that it only had two sites suitable for any large-scale development. However, it had to use one of them to build a new high school. Ironically, one reason it had to build a new high school was that, with the collapse of the coal economy and the exodus of young families to find work elsewhere, it could no longer afford to operate the three small high schools it had previously.

A national economy growing at 3.5 percent each year is not going to magically rain down riches on Dickenson County, not when there’s just one site available for development. That’s one reason why Griffith has backed expanding the Abandoned Mine Land program, which helps convert old mine sites into marketable economic development sites. Right now, that program just covers West Virginia, Kentucky and Pennsylvania. He and others have wanted to expand it to include Virginia and other coal states. But what does Mulvaney’s budget – Trump’s budget – do to that program? It eliminates that, as well.

How, exactly, does that help bring economic growth to Dickenson County?

Another problem that rural areas everywhere – be they in Appalachia or elsewhere – is that the workers often don’t have the skills the modern economy requires. That’s a problem everywhere, actually, including the Roanoke Valley, but it’s more accentuated in rural areas. Economic growth of 3.5 percent isn’t going to bring growth to rural areas unless there’s a workforce there capable of doing the jobs the new economy is creating. How to train that workforce? Well, at Mountain Empire Community College, there’s now a program to train students to operate drones. At University of Virginia’s College at Wise, Mountain Empire Community College and Southwest Virginia Community College, there are programs to train students in cybersecurity. Both of those are intended to help position Virginia’s coalfields to attract technology jobs. Guess who helps pay for those programs? The Appalachian Regional Commission.

Take that funding away, and what happens to those programs? The state’s unlikely to fund them; state government barely recognizes anything outside the urban crescent these days. The local governments? They can barely fund their K-12 school systems, which once depended on coal severance taxes that now have nearly dried up. Yet, under Mulvaney’s logic, 3.5 percent economic growth will somehow take care of things. This is magical thinking. It is certainly not the thinking of someone who understands how the economy actually works. It is, though, the product of inside-the-Beltway theorists, whose conservative ideologues are just as out-of-touch with the reality of rural America as their liberal counterparts are.

The Appalachian Regional Commission is simply a metaphor for a whole range of rural-related economic development programs that Trump wants to eliminate.

The Economic Development Administration? It’s helped jump-start a technology hub in Southwest Virginia by funding the initial development of the Virginia Tech Corporate Research Center and paid the biggest share of Floyd County’s “innovation center” that hopes to attract high-tech start-ups. But Trump zeroes it out.

The Essential Air Service program guarantees commercial air service to small airports (including one in Virginia and five in West Virginia) – a luxury for leisure passengers but essential for businesses that locate in rural areas. Gone.

That clean coal technology Trump promised to invest in? Not happening.

Making America great again apparently doesn’t include rural America.