Money makes the Commonwealth go ‘round. The pre-eminence of economic issues on Virginians’ collective minds has continued over the years, manifesting its electoral importance among gubernatorial candidates from every party. It was clear in the promise of reducing automobile regulation in Jim Gilmore’s 2001 campaign , as well as Terry McAuliffe’s 2013 campaign slogan of “Putting Jobs First.” More recently, economic insecurity precipitated the rise of populist figures like Corey Stewart and Tom Perriello in the primaries this past summer.
Despite this political focus on the economy, however, Virginia’s economy has shown no signs of appreciable development for years. According to the U.S. Bureau of Economic Analysis, Virginia’s real GDP grew a measly 0.6% over the past year - barely a third of the national growth in GDP over the same window. Considering the lackluster view of national GDP growth that has hovered below two percent, one can only imagine the outrage of a Virginia public informed that their own state runs nowhere even close to that.
The worst part of this dreadful performance is that it’s actually a marked improvement from earlier in the tenure of Terry McAuliffe’s governorship. After his first year in office, McAuliffe’s Virginia enjoyed a real GDP growth of 0.00%. Bupkis. Despite his promises to make 2014 a year of “putting jobs first,” Virginia’s economy set the standard that year for what would be next to no growth for the coming years.
Chief among the factors that could explain such poor performance is the acute regulatory burden on Virginia's market sector. According to the CATO Institute’s index of “Freedom Among the 50 States,” Virginia under Terry McAuliffe has been decreasing in economic freedom while increasing its regulatory burdens to sit at a middling 15th and 23rd place nationwide for respective freedom in those areas. These slides in the freedom rankings mirror Virginia's overall economic decline. From 2010-2014 for instance, Virginia’s economic freedom rating from CATO has decreased at an average of one place per year. Over the same time, as business shrunk under both recession and the stingy economic environment, GDP growth in Virginia plummeted by 96% of the 2010 rate.
It is no coincidence that these rankings have fallen in tandem with Virginia’s lackluster economic growth amidst the entrenched political influence of establishment Democrats in the Commonwealth. If Virginia hopes to stake its rightful claim as an economic leader among the fifty states, voters this fall need to take a stand against the inefficiency of Democratic economic policy and fight for the economic freedom that will encourage peak economic growth.
Given the underwhelming performance of Democratic policymakers, this November could be a key window for a conservative message on economic growth. Virginia has a decided need for less restrictive regulatory policies and a freer economic landscape. And if recent polling is any indication, voters seem to be accepting these facts in growing numbers.
The latest Hampton University poll shows Gillespie with a solid lead over Northam. In this poll, Gillespie claims 41% of the vote among likely voters compared to only 33% for Northam among the remaining decided folks. Even more moderately-tilted polls show enormous improvement for Gillespie compared to his early-campaign struggles. As seen in the latest poll out of Monmouth University, the race for Virginia’s governorship is as close as ever. Despite Northam’s success in earlier polls, Gillespie has made consistent gains over the last few months - mirroring similar progress from Jill Vogel, his Republican counterpart on the Lieutenant Governor ticket. As both candidates focus in on economic liberalization and a more market-centric approach to jobs creation, the race for Richmond has become more winnable for Virginia's Republicans. From the Monmouth report:
“48% of likely voters support Gillespie, the former national GOP party leader, and 47% support Northam, the Commonwealth's current lieutenant governor. Libertarian Cliff Hyra gets 3% of the vote and 3% are undecided. Last month, Northam had a 49% to 44% edge over Gillespie while the race was tied at 44% each in July.”
What is clear within this deadlock is that Gillespie has increasingly closed the gap on Northam. If he can further capitalize on Virginia’s glaring need for more economic and regulatory freedom, he might pull in the political support needed to take the lead.
Between the damaging influence of President Trump and an infamous record of on women’s issues, reasons abound to be bearish on Virginia’s Republican ticket. Aside from Trump’s antics, the historical record leans also leans against a Republican victory: seven of the latest eight governors have been elected from the opposite party to the sitting president. While McAuliffe's recent election during the Obama administration swapped that trend, such tendencies only tip the scales of probability further away from a “red” Virginia. Indeed, Republicans haven’t won a statewide Virginia election since 2009 when Bob McDonnell edged Creigh Deeds for the governorship. Given McDonnell’s run-ins with corruption that took his infamy to the Supreme Court, it’s doubly easy to see why Virginia’s voters recently lack trust in establishment Republicans.
Still, the Democratic establishment, represented in this election by McAuliffe’s lieutenant Ralph Northam, offers a weak economic message. The economic platform on his website mentions nothing about Virginia’s need for growth or the limitations on small business development that grew under he and McAuliffe’s leadership. Contrasted with this silence on such key issues, Ed Gillespie’s platform website is headlined by calls for tax reform (primarily in the business sector) and features prominent calls for “removing barriers to job creation.” These are excellent calls for the sort of economic liberalization key to a successful campaign on the fiscal front.
Surely, economic freedom does not directly cause economic growth - as external factors like the real estate boom for new D.C. staffers, in one instance, led to growth in sluggish Maryland and our own Northern Virginia early in 2017. However, it is no coincidence that states like Idaho and Alabama are recently in the top-ten of both CATO’s economic freedom indices and the BEA’s growth charts. Meanwhile, states like California and New York - whose dismal business environment is analogous to both Northam’s ideals and last place finishes on the CATO rankings - find themselves among the bottom-ten states for GDP growth.
In truth, Libertarian candidate Cliff Hyra is the only one running this fall whose platform addresses the comprehensive pitfalls of Virginia’s regulatory beast. He is the only candidate that speaks openly against Virginia’s obscure liquor monopoly through the ABC system and proposes cuts to non-marginal tax rates that most harm small business. However, as Hyra pulls in barely 3% of support, it looks like the Libertarian revolution will remain on hold in this election. In the popular struggle against Northam’s economic misguidance, that would leave Gillespie as the soundest existing option.
Virginia and its citizens deserve to remain at the center of economic growth in the United States. Central to that vision of economic growth is the expansion of fiscal and regulatory freedoms, a consideration totally ignored by the Democratic campaign so far. Finally, as the young Libertarian ticket finds rough political footing (despite its true championing of sound economic growth) Virginians concerned with the economic development of their state are left with a resounding option.
In the fight against red tape, the best solution might just be a red Virginia.