John Hood on the state's steep climb ahead

Recently I was in the Caldwell County town of Lenoir, my father's hometown, watching the sun rise over picturesque Hibriten Mountain. I wish I could say it symbolized the dawn of true economic recovery in North Carolina.

But I can't. Hibriten is 2,211 feet above sea level. Would that we faced such a comparatively gentle climb out of the depths of the Great Recession. I fear that a more appropriate topographical analogy lay to the west of me at Yancey County's Mount Mitchell, the 6,684-foot peak that is the highest mountain in the eastern United States.

North Carolina's unemployment rate is just over 10 percent. It has been at or near 10 percent for years. If you add to the traditional jobless count those unemployed people who have given up looking for work plus those North Carolinians who are working part-time while looking for full-time work, this expanded "U-6" rate is about 18 percent — and higher still in regions such as Rocky Mount-Wilson in the eastern part of the state, Laurinburg in the south, and Hickory-Morganton-Lenoir in the west.

Our urban areas are somewhat better off. The Triangle will likely post a better-than-average recovery. But continued woes in real estate and the financial sector will dampen Charlotte's growth for years. And in Greensboro, Winston-Salem, High Point and other Piedmont Triad communities, several new studies suggest that employment won't return to its pre-recession level until the end of the decade.

With their traditional manufacturing industries permanently relocated, these communities are reinventing themselves. They are full of committed, talented people. But reinvention is risky and will take time.

Politicians are always quick to make promises. It's one thing if they promise to vote a certain way on a certain bill. That's a promise they can easily keep, and you can hold them responsible for it.

But beware of politicians promising to wave some magic governmental wand and make North Carolina's economy whole again. Much of what is transforming American and world commerce is beyond the control of any politician. And much of what politicians have done in the past three years, particularly in Washington, has made our economy worse, not better. Their regulatory excesses and fiscal imbalances have chased investment capital into low-risk, low-return securities. These policies have shattered business confidence.

Job creation is a side effect of productive investment. Someone has to be willing to risk capital to start or expand a business venture. That investor or entrepreneur is motivated by the prospect of profitable return, not a desire to employ people for the sake of reducing the unemployment rate.

If you demonize the investors and shackle the entrepreneurs, you make it less likely they will be willing to take risks. They can redirect their resources and energies elsewhere, to other states or nations. Or they can put their money in low-productivity instruments such as government debt, signaling their willingness to accept lower rates of return in exchange for lower risk of economic loss or political confiscation.

I know this may sound a bit rudimentary. Doesn't everyone recognize that without job creators, there are no jobs?

No, apparently not. President Obama, for example, seems willing to blame "millionaires and billionaires" for the nation's fiscal and economic problems. If he has his way, their taxes will rise and their businesses will be subjected to massive new environmental regulations.

In the midst of such economic misery, these policies are senseless and reckless. Even if Washington confiscated 100 percent of the income of the nation's richest people, that would constitute only a small deduction from the federal government's future indebtedness. And those with the smarts to build multibillion-dollar businesses won't be dumb enough to let the government steal all their money, or even half of all their money, in the first place.

I guess true believers think the Keynesian claptrap they spout is valid. I guess they think government can spend investment capital more wisely than investors can.

They're wrong — and their errors will make North Carolina's climb out of recession still steeper.