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Major support provided by High Point University, the Premier Life Skills University, focused on preparing students for the world as it is going to be.

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Can you remember one of those really good visits and talks with a group of friends over coffee or an adult beverage?

Even, you know, the ones where you really exchange ideas, you go back and forth, you debate issues, you find out things.

Well, it's kind of what we're trying to do on this special program.

I'm Chris William, welcome again to the most widely watched and the longest running dialog on Carolina business policy and public affairs with our insiders panel.

It's unscripted with the idea that we're going to find out some of the water cooler off script, talking about issues and what may not be on official meeting agendas.

So stay with us because we start right now.

- [Announcer] Major funding also by Foundation for the Carolinas, a catalyst for philanthropy, and driver of civic engagement, helping individuals, nonprofits, and companies bring their charitable visions to life.

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Welcome to brighter banking.

And, Martin Marietta, a leading provider of natural resource-based building materials, providing the foundation on which our communities improve and grow.

On this edition of Carolina Business Review, Dan Gerlach of Dan Gerlach LLC, Georgia Mjartan, Central Carolina Community Foundation, Aaron Nelson from the chamber for a Greater Chapel Hill Carrboro.

And Antjuan Seawright of Blueprint Strategy.

[Exciting music] Welcome to our program, Happy S I'm Chris William, and, welcome.

Good to have you guys back.

Good to see you again, everyone.

Dan, how long's it been like?

It's been a few years.

Yeah, I know you should be here more.

And and shame on us for not including you.

But thank you, both for coming.

Georgia, you're going to get the first pitch here.

You know, a lot of the federal policy in DC, of course, is high circus.

And there's a lot going on about what should be cut.

What is it isn't cut.

What kind of momentum is going on?

Does this kind of talk does it worry the statehouse?

Does it worry, Joan Street in North Carolina about how this is going to affect their state budgets.

So what are you hearing on the ground.

Like on the ground?

State agencies need resources from state and federal.

Right.

And what we see is that those human serving organizations that Department of Social Services, that health serving organization, they are reliant on federal funds.

So when those dollars walk away or when there's uncertainty, they're going to go to the state and they're going to have to say, Will you fill in these gaps?

Because if you don't today, people will suffer.

There's going to be a need.

And so certainly this is a time where our legislators are going to need to think really hard about how they're going to get.

To, you know, how this works, don't you, Dan?

I mean, is this going to be fiscal triage?

The states have to do.

Really fiscal triage?

I think the state governments have been the beneficiaries of federal largesse of of the money that that the federal government injected into the economy in a variety of ways.

But now I think state governments are reluctant to do too much planning out front because they don't want to have the appearance that they can handle this.

Right.

The federal government's the only one that can print money, Chris.

And so the state governments are have to have balanced budget requirements in the Carolinas.

They're going to be, very tough on that.

But they don't want to kind of lean out too much and say, oh, sure, we can handle this.

Antjuan, is this, you know, I don't want to put words in your mouth.

Of course, I never would have in the past.

And you wouldn't take it any way but but, but the idea that whatever comes from D.C. to the States, it's coming.

It's just how it's going to be characterized.

Well, we assume we assume that things are coming.

I think the fear for state agencies and the fear for people who have to interact or intersect with state agencies, on a regular basis, is what may not come.

You think about cuts to the Department of Education, USDA.

What does that mean for summer feeding programs and afterschool programs?

You think about, a lot of these agencies at the state level who receive federal funding.

What does that mean?

And you think about rural communities like the ones I grew up in or communities that look like mine, when we already do not feel like resources make it our way.

There's a bigger sense of fear about what the future means.

So the idea that what we learned as children give us this day our daily bread, is many of our realities.

And the fact of the matter is, there's some in Washington who think that these cuts, in these bruises will impact certain populations, but it impacts everyone.

We talk about cutting Medicaid.

That impacts everyone.

When you talk about cutting food and all these, it impacts transportation grants, all these things.

It impacts every single person in this country, regardless of your race, your politics or anything else, people put us under umbrellas for.

The same question.

Here is, is a being too reductive to say it's going to come?

It's just how it's going to come.

You think it's going to come?

I think that we should be preparing for substantially less revenue in the Research Triangle region where I am, where our university in Chapel Hill, $1.5 billion a year in federal research.

How about UC health care for $4.5 billion budget, 50% of which has a federal payer?

RTI has had layoffs.

I've been here for 24 years at my chamber, and I don't get many warn notices.

That's when people do mass layoffs and we've been receiving those.

And it's not a community easy to re - you know, to attend a community college, to retrain.

You're losing your PhD job.

And we're expecting big changes to simply reducing the overhead of NIH grants at USC.

Chapel Hill is $100 million a year, lost revenue and a little bit of federal funding to that.

Now you're at a quarter billion dollars a year in lost revenue.

Now multiply that times North Carolina state, Duke, Clemson, on and on and on and on.

Those reductions will have real impacts.

If I can just add people literally are going to die as a result of things happening in Washington.

When you start cutting community health grants to keep those facilities open and making that make the payroll, that means someone in rural North Carolina, rural South Carolina, who had a community health center that was ten minutes away.

Now they don't have to take a 45 minute ambulance, right?

If it shows up.

People die.

When you talk about cutting funding for kids, like at the first steps level, when you think about long term, what does that mean?

That child does not develop early.

The long research says the long term implications of that could literally mean jail, death or anything else.

And that's what I don't think our leaders understand that making this political.

But this really is about survival for so many people.

So does this start to affect economic development?

Absolutely.

You think so?

I do, I do so, you know, I'm a shareholder in a couple of banks.

Right.

And as the private sector, we rely on public data.

Don't we.

And and when that public data stops being available, how can we be responsive in the, in the private sector, right, with private sector solutions.

So I think you know, it's not only the dollars flowing down, it's also the, the the research that fuels innovation.

It's also the data that we all use in our industries.

Right.

And I think when that starts pulling back, we're going to feel it, in across all sectors.

Do you hear that Dan?

Sure.

I hear it a couple ways.

One is, is that the uncertainty business abhors uncertainty, right.

You see a slowdown in economic development before elections because there's uncertainty and generally resolves itself.

But now so much change and so much volatility.

And who's in charge, you know, and who's going to do what.

And you see the news every day.

It's so changing, that businesses are reluctant to act.

And that's not good for economic development because business wants stability and predictability.

The second - to follow up, a lot of the economic development, a lot of the big wins in the Carolinas in the last few years have been in the clean energy sector.

So I think this kind of reflexive, clean energy must be bad.

I mean, when we're going to need all types of energy in the Carolinas to be able to be competitive.

Do you think that's going to be tabled?

Those kind of initiatives?

I think people are going to ponder or reflect anew upon this and come up to it.

But the problem is that the uncertainty and the chaos of all of it may not resolve itself, because it's not going through the traditional process.

There's a lot of, kind of acting quickly.

And whether or not the Congress and other people who have time to kind of, to pour the milk in the saucer to let it cool for a minute before you act is not there.

So I'm not defending Trump or Donald Trump or the policies.

But I want to ask you this.

Somebody said recently on an a dialog, it and it hit me.

They said they weren't supporting the administration because they necessarily agreed with him or liked him.

They were supporting it because he was a fighter.

And what I heard was someone was willing to make some change, albeit it's uneven.

And you've heard me say this before, that economists call this creative destruction.

So can it be couched in a way that it's change and in uncomfortable?

Well I think, you know, everybody likes a fighter.

I want one who's decided not to punch everybody in the face and just the ones that he's aiming at.

And so if we need some destruction or we needed some, investigation on how to make things better, those can be done intentionally and can just be done thoughtfully.

We can attack and fight, but let's be a little more cautious and careful.

Some people say, well, oh, the wind is all blowing, but at some point it'll settle.

Western North Carolina tells you when it settles.

There's a wreck.

And how how do you put things back together?

So there's this blustering storm.

I just wish that we were more thoughtful, careful about where we're trying to find our waste, fraud and abuse, where we are trying to make reform.

Is this going to last the whole year?

Is this kind of uncertainty going to last a whole year?

I think it may last four years.

Because I think the strategy for some in Washington is to put down a marker that will out would that will withstand the leader who's leading the mark, if you will.

All fights are not good fights.

And I think that whether you agree with the previous administration that the economy was humming pretty good, most people.

Well, it wasn't perfect, but they were better than they were during Covid.

Now we're getting to a situation where you pull back grants on clean energy.

Businesses will not come, jobs will not come.

The planning for that, all those things have impact.

You start making tariffs conversations, the cost has to be passed down to you, me and everyone else.

Most people are living paycheck to paycheck.

Forget about trying to make ends meet.

People are putting two ends together, hoping to meet.

So they're paying high prices for gas, goods and services.

That's going to be consequential for a lot of people.

Okay.

So I want to distinguish between one is, is that one of the fights is, is that the, 2017 tax cuts expire this year.

And if they aren't renewed, then that means taxes will go up for a lot of businesses, a lot of communities and so forth.

And that's one thing the business community is, is fighting on just to keep that baseline at that baseline requires all these substantial cuts.

That's another story.

What people, not insiders or the insider panel, but let's talk about people who don't feel as much connected.

They're thinking some of the stuff they've read about seems silly to them and seems frivolous.

Now, the problem is that the real meat of it, the stuff that we've been talking about previously, they aren't always focusing on, has it hit yet, and all of a sudden that's a different color.

So the kind of these, headline grabbing kind of examples that seem frivolous versus the real meat and potatoes and.

Right.

But I have not hit yet.

But I want to go back to this point about the fighter.

Right.

Why did we want a fighter?

Because we were discontent.

That's a good question.

There was a desire.

Exactly.

There was a desire for a fighter.

And I think you brought up that university administrative overhead.

You know, you expose that, you look under the hood and there are a lot of people who are mad who are saying, those are that's that's a lot of my money.

Right.

And what is it paying for?

There are people who call for public services and have to be put on hold for 20 minutes.

And that's their whole lunch break because they're working people.

Right?

So we have to go to the core of it and say, do we burn or do we surgically remove the parts that are not working and fix it?

And I would say effectiveness, a responsive - a responsive government over an efficient government any day.

But but look, no one is I don't think anyone at this table and anyone in their right mind is against getting the waste, fraud and abuse out of the system.

Right?

But as you enter into hurricane season, knowing that North Carolina's had its challenges and you lay out the folks at a hurricane response agency, that's a problem.

We planes are falling out of the sky.

You layoff FAA workers.

That's a problem.

And you look at the measles outbreaks and all these things, and you're laying off people at these agencies for the sake of checking the political box.

That's where it begins to be a problem, both in the short term and the long term.

Because the one thing about cutting in state government versus the private sector, you cannot build it back up as quickly.

It does not it does not repurpose it.

I mean, the point there is, is that when the economy is toughest is when government is needed the most.

When the private sector sees reduction in demand, they reduce force because that's how it works.

But but government is supposed to be a counterbalance to that.

So I violently agreeing with that last point you just made.

I think they're going to come after this.

But the trickle down is is coming a lot faster than a trickle.

I mean, we're seeing impacts already on the ground.

I was trying to help, a student getting his culinary degree.

The community college needs a placement in a kitchen at a restaurant.

I thought everybody's hiring in restaurants you can't find.

We called around.

No, we're contracting our kitchens.

We are reducing hours.

Catering is way off.

Since, the universities reductions cater, people choosing to go out to eat.

We're seeing on the decline.

My daughter's hair braider.

I asked her this weekend.

I said, you know, are you are you worried?

And she said, I'm worried because getting your hair done is a luxury.

Luxury, right?

And when people are worried about whether their student loans are going to be forgiven, right, right.

They're not going to go get their hair braided.

But when things got bad in the past, the federal government's that we had the PPP, we had eidl we had - none of that is coming this time.

And the conversations of helping people prepare for what?

Okay.

Well, you could say PPP and a lot of the expenditures were distortive to the economic model.

While it did.

Yes.

But I don't want to come back to some.

I know none of you are bankers and financial professionals, but I do - Jay Powells testimony in recent weeks, but also his news conference this week, said something interesting.

And it wasn't about whether they're going to adjust interest rates or not.

What he said, he said, when we model and I'm, I'm kind of short phrasing this.

When we model tariffs, we assume X and we assume Y, and we assume that it's only going to be transitory, in other word, temporary.

For I, I know that and kind of know that laugh a little bit.

But for a for him who is so careful about what comes out of his mouth to say that, I think that was the big unreported headline.

And what I'm trying to putting out here now is for someone to say, we think that's a problem, but we don't think it's long term.

Can we can we get a sense that some of these issues we're talking about now here and I know, I know, we already a question, but do we get a sense that these big things like the tariffs will eventually burn out in the short term, not burn out, but will settle because it is extracting pounds of flesh?

Maybe.

But then, how do they build back afterwards?

So we have a local printing company makes the magazine, for our local community.

$100,000 more is what paper will cost them this year is what their calculation is, what choices and changes will they make?

And then, if it is transitory, what will happen?

You know, how long do they have to wait?

Or the brewer, yes.

Chris, microeconomics was the reason Donald Trump won this election.

It wasn't about the economy as a whole.

It was microeconomics.

I said feel-a-nomics on other programs.

And so when you talk about short term pain, first of all, we should never assume, as our parents told us, the first three letters of assume we should never do that.

But second of all, most people cannot handle short term pain because they're already in pain.

And so we talk about the short term pain.

That's going to literally mean dismantling a lot of families.

And then you cannot find a person who believe that tariffs are a good idea in this moment, who can promise that we will not have a recession.

And I don't care how you counter, a recession is bad for every single person in this country.

Georgia, you were going to say something?

Yeah.

No, I don't want a recession.

I'll say that.

I don't want a recession.

And, you know, I sit in a philanthropic seat now, right?

And the backfill that philanthropy that philanthropy can bring is absolutely not there.

No, no.

There is no backfill that we can provide with the limited recourses...

So you don't have the capacity.

Absolutely not.

When Dan was talking about agencies, both state level the federal that aren't going to do it, it always falls to the nonprofit.

Right.

So here's what I'm going to tell you.

I'm going to tell you the story of a nonprofit that is helping new Americans get jobs and no longer has funds from the federal government that they were using to buy steel toed boots so that people could get to the jobs that our employers in Columbia need those new immigrants for.

Yeah, right.

That's what's happening.

And do we have the resources to backfill a few thousand dollars for steel toed boots?

Absolutely.

Do we have the resources to backfill that, you know, times a thousand?

Absolutely not.

We don't.

Dan?

Well the recovery philanthropists.

And I can assure you that that's exactly right.

I mean, because philanthropy is trying to say, well, maybe we can lend our voice to this.

I mean, that's that is foolish.

Except to say that that they don't have the capital to do so.

I think where this ends up with your tariff question is the problem is, is that here is we want to do more of our stuff.

Well, then let's build our industrial capacity here.

The previous administration wanted to do that.

Let's continue that before you get into a tariff war and raise prices for everybody.

I think that says is I think what Jay Powell is doing is using logic as a weapon.

And I think it's a dangerous thing to pull out of the scabbard right now.

Let's, we've got about seven minutes.

I want to move on to something less controversial, like education.

I'm kidding.

But on the state level, in in the statehouse in Columbia, but also on Jones Street, this idea that teacher pay is is important.

I know there's a house bill that is being forwarded for an increase in teacher pay just to be competitive with South Carolina.

But in general, do you think that teacher pay initiatives will not lose the momentum that they need anyway?

But I mean, I yeah, nobody's ever gotten voted out of office for raising teacher pay.

Teacher pay is popular.

It is will be popular forever.

Votes for it.

And no states ever regretted doing it.

So I think that it should maintain momentum.

Heres going to be the challenge with education as a whole.

You're going to have people fearful about taking it on.

When you talk about defunding public, defunding education, that means dismantling the Department of Education.

What person in their right mind is going to say, I'm going to go into a profession where the leaders of the free world do not prioritize, and the fact of the matter is not just about teacher pay.

It's about education as a whole.

In South Carolina, there's a real discussion about taking money from the public, money, if you will, and putting it into private education, whether you agree with that scenario or not.

That's scary, because many people go to public schools in South Carolina.

Minimum adequate is our standard for education.

And it's not just funding teachers, it's the resources teachers need to teach that's going to be critical.

And so I think there's a big cloud of fear for the education ecosystem as a whole right now because of some of the conversations happening in Washington.

But our question, our question is more teacher pay.

Yes, Aaron is exactly on point.

I think the problem with the federal cuts is that they handle title one, they handle Special Ed.

Right.

So the types of characteristics that people cannot change, the types of places where people live that dependent on that federal government money to make it minimally adequate, as you say, free and appropriate on our side is a challenge.

But in our place, our barrier to economic growth is the child care problem, right?

I mean, we have just in your previous career, I mean, what that is something we have bipartisan agreement that's an issue we don't have bipartisan agreement yet on solution.

So I think if that can help get better, that's going to help us.

Without going.

Back on you in one.

Second, I hope you do.

The fact of the matter is, teacher pay is tied to education.

If there's fear about the industry, you're not going to be able to get teachers to go into the stands and enter an industry.

I can pay you $70,000 a year, but if I can't find people who want to take on the $70,000 a year job, it doesn't matter when I'm paying you.

And so we've got to stabilize things that should already be stable in our communities.

Education has always been one of the great equalizers and stabilizers.

Antjuan, you mentioned something that I want to pick up on.

You said it's teacher pay.

It's also all those other supports, the ecosystem.

That's right.

And that ecosystem on the ground.

I talk to teachers every day.

I have three elementary age students.

Right.

So I'm in touch with the teachers.

But your state house here is going to fund that.

Here's not, nope.

Here's what the state House is not going to fund.

The state House is not going to fund the special education support that's trying to come in to float in.

And so in a public school classroom today, there's a teacher who has a child with autism attached to her wrist by a string so that that child won't wander because the federal resources are not there today to provide that in classrooms.

Okay.

So let's go to title one, Special Ed.

Dan?

I would try to increase teacher pay and see if it helps.

I think it will help.

I agree.

With you.

It's not.

It's not it's necessary but not sufficient I would, I wasnt saying that wasn't.

I want to come back to something you said that one title, one Special Ed, other things they're not being done away with.

They're being redirected or re characterized if D.O.E.

gets closed down.

Well, I think that's part of the issue of how that gets done.

Right?

I mean, the thing is, I think Americans are very good at blowing things apart.

It's like starting them again.

It's like when Covid, we stalled the engine to get that engine started back up.

Like as a special education teacher, this conversation happens in our household a lot.

Is our state ready to receive whatever might be coming from the feds?

Do we have the infrastructure?

Do we know the priorities or what the measures ought to be in order to fund and not create a gap or a period of great disruption?

Well, we change quickly.

Quickly because we're here gonna run out.

And we assume that the federal government is going to send all the necessary resources to the places it needs education to survive.

And I think that's that's the challenge.

And then we also assume that people at the state level are going to do what they need to do to get the funds to the real the challenge pockets in in the community like South Carolina, they don't have that confidence in our education system and the leaders who will decide that.

Okay, final word on education.

Let's move on.

We have about 2.5 minutes.

Transportation, both critical in both Carolinas, cannot build or repair enough roads.

Transportation is now seeing something in the urban cores.

Columbia, Spartanburg, Durham.

I'm trying to think Charlotte, Wilson, North Carolina down east, they're taking bus money and directing it toward ridesharing.

Is that going to work?

Is that a fix?

Im just glad theyre talking about local government.

Because local government is the least partisan, is the most flexible, is the most responsive to what communities needs are.

It's because they're in the top.

Thats because theyre in stores with their constituents .

Thank you.

I love you, but I have to disagree with you.

I don't think local government is is nonpartisan as you think.

But to answer your question directly, I don't think as long term healthy because it's depending upon a system that's not really stable as it once was.

I think that when you think about the infrastructure of a bus system, we know that's going to be there, and we know the pressure is on local leaders to step up and sustain it if need be.

For an example, in Columbia, in Richland County, where Columbia is, we passed a penny sales tax where funds were directly impacted in to insert it into the bus system to keep it afloat.

When you get to be ride sharing all the complications that could come with that.

Cannabalize that?

I'm not sure.

Overwhelmingly support for that, bipartisan support.

Just what is that?

Our concern is we raised the tax, but we were what we were relying on a 90% federal support and we have no confidence anymore that what got put into the budget would actually come to us to help us with our infrastructure and our new lines.

The rideshare is a good and good gap solution.

It's a good after.

Our solution is a great for rural places to try to get folks in.

I don't think it's...

But it's not a corpus of a transportation?

I want to talk about rural because we're just trying to get I-40 open, y'all.

I mean, we're just trying to get I-40 open in the mountains to keep that going.

We laugh about that, but I know its not fair.

I'm not I'm dead serious about this.

I'm also dead serious about our transportation issues, addressing all the, quote, private roads and bridges, which are the only means of access to a lot of our mountain communities that on a bipartisan basis, we put money towards that in the statehouse just this week, but much more that is going to be needed done, because that is life and death.

Because when they replace the bridge going into a community near in Wilkes County and the fire engine, the bridge buckled.

Yeah.

Okay.

Fire engine falls over.

That's our problem.

You know, that's fair.

And that's going to have to be the last word.

Thank you for joining us on that, Dan.

Just to keep us grounded, not just in western North Carolina.

Thank you all for being here.

You are great.

For being here.

This is good.

Welcome to be an an insider, Dan.

Not like you were decades ago.

Even though you're outside.

Thank you.

We're out of time, until next week I'm Chris William.

Good night - [Announcer] Gratefully acknowledging support by, Martin Marietta, Truliant Federal Credit Union, Foundation for the Carolinas, Sonoco, Blue Cross Blue Shield of South Carolina, High Point University, and by viewers like you.

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