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Report from Phoenix

March 4, 2014

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Peter Gold, Esq., president of TheGoldGroup and a GIC vice chair had told us, “You must do this before we go to the airport.” We were early and got a table. On the way out, we were amazed to see the line of patient folks waiting outside the door. Yes, Matt’s Big Breakfast in Phoenix, Ariz. (www.mattsbigbreakfast.com), is a renowned local eatery. Delicacies include homemade sausages and some very tasty bacon. Go to Phoenix, see the date palms and saguaro cacti and eat breakfast at Matt’s.

The memorable breakfast concluded our trip to Phoenix for the Global Interdependence Center conference focused on US trade relations, the role of Arizona, details about companies seeking locations in Arizona, and the relationships among Canada, Mexico and the US 20 years after passage of NAFTA (North American Free Trade Agreement). The discussions and presentations are available on the GIC website, www.interdependence.org, and the direct link is http://www.interdependence.org/resource/. If you have any difficulties finding any files, email a help request to [email protected].

In particular, we call attention to Brandeis Professor Catherine Mann’s exposition on the elements that drive decision-making by companies. Catherine dissected those elements, identifying the ones that help to restore the US’s competitive advantage in places like Arizona. She characterized them in serious mathematical terms but was also able to translate the formulae into a remarkable discourse, which was understandable by her lay audience. I have watched Catherine at work for many years. She is a colleague in economic organizations to which we both belong, and she sits on the board of the GIC. This Phoenix presentation was one of her finest hours. We recommend readers spend some time browsing her slides as well as the rest of the materials from this very meaty conference.

My takeaway from the conference (besides the weight I gained over breakfast at Matt’s) is how large a potential exists for US growth if our American policy path will only permit our country to flourish. Division between the political extremes constitutes a serious obstacle in our country. We see the socialist left mostly (not entirely) housed in the Democratic Party and the intolerant right mostly (not entirely) housed in the Tea Party wing of the Republican Party.

[…]

Divisive politics got sneeringly hot while we were in Phoenix. We were in the midst of the extreme positions people are taking in the debate over Arizona Governor Jan Brewer’s veto of Arizona Senate Bill 1062. We saw the depths of the political divide in the US.

The evolution of 1062 is instructive. A lobbyist for an extreme position on the right convinces a knuckle-headed legislator to introduce a bill that allows a merchant to refuse service to a gay customer, based on a freedom of religion argument. That is, merchants can say that because of their religious preferences they won’t serve the customer who, they suspect, may be gay. Think about that for a minute. Under present law, they cannot deny that customer due to his or her race or gender, but SB1062 would have allowed the merchant to say no on religious grounds. How quickly this becomes a slippery slope.

[…]

The GIC conference of businessmen and -women from various enterprises included political leaders of Arizona and its cities. They discussed SB1062. They opposed it. The audience broke into spontaneous applause when one of the speakers forecast that Governor Brewer would veto the bill. These are people whose natural inclination is toward fiscal conservatism, business expansion, the reduction of regulation and criticism of the Obama Administration for many of its policies. But these same conservative-leaning folks realize that the Tea Party extreme had gone too far. These GIC attendees were thoughtful enough to see how damaging this legislation had already been. They knew SB1062 was injurious to an otherwise great growth story in the US and in Arizona.

[…]

We left the GIC conference in Phoenix, Ariz., with too much of Matt’s delicious breakfast in our bellies and our heads spinning with lots of new thoughts to contemplate as we move forward in 2014. Arizona is a bullish story, notwithstanding the behavior of some knuckleheaded legislators. Rest assured that the current and prospective leaders of this state are determined that knuckleheads will not carry the day. Governor Brewer realizes this. That is why she vetoed SB1062.

 

The preceding is an abridged commentary by David Kotok of Cumberland Advisors and has been reposted with permission of the author. The complete commentary is available at http://www.cumber.com/commentary.aspx?file=030214.asp

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