Tax cuts are best medicine for U.S. economy

Monday, May 5, 2003

For the unemployed these days, scanning the Help Wanted section must be akin to reading the book of Revelation. You know things are going to get better, but you have to endure some pretty scary parts until they do.

It's never good to be unemployed, but these are especially scary times.

The national unemployment rate rose to 6 percent last month, matching an eight-year high, creating the deepest job slump in almost 20 years.

The economy lost 48,000 jobs in April, the U.S. Labor Department reported last week, ratcheting up the jobless rate 0.2 percentage points. In the last three months, 525,000 jobs have disappeared.

Locally, things aren't as bad. Missouri's unemployment rate was stable in March, falling two-tenths of a point to 5 percent from 5.2 percent in February. Cape Girardeau County had a jobless rate of 3.6 percent in March, which is what it was in February.

We're doing OK. Rubbermaid still employs about 1,500 people. P&G has 1,400 people working, and the hospitals account for more than 3,000 jobs. The university has its 1,600 people employed. Those are valuable constants for our workforce.

But seven counties, including two in the Bootheel, reported double-digit unemployment rates. If something doesn't change, the dire unemployment situation is bound to catch up to us.

President Bush, fresh from his war victory, has taken his tax-cut campaign on the road, offering it as a solution. Bush wants to reduce taxes to the tune of $550 billion or more over the next 10 years.

He says that would help stimulate the economy and create 1 million jobs by 2004. He believes an end to dividend taxes and an acceleration of tax cuts enacted in 2001 will revive the economy.

Opponents say it will only balloon the federal budget deficit and that doing away with the dividend taxes is just a favor to the rich. Maybe. But let's think this through. The wealthiest Americans are also the ones who own businesses and provide jobs.

The president's proposal to eliminate the tax on dividends collected by corporations is also pro-productivity. It leads to business expansion and new jobs.

Do we have to explain everything to these people?

It's not just a favor to the rich. If the tax cuts would give the country the boost it needs by creating jobs, it would be a favor to all of us.

Cape Shoe moves

Cape Shoe Co., Southeast Missouri's only shoe manufacturing company, has recently moved into its new facility at 2555 Rusmar in Cape Girardeau. The building was acquired through a property exchange with RM Coco Fabrics, which formerly occupied the building. But RM Coco purchased the former Florsheim Shoe Manufacturing building from Cape Shoe last year.

Tom Kelsey, commercial broker with Lorimont Place, Ltd., handled the transaction for both parties.

Eli Fishman, owner of the shoe manufacturing company, said the present building, consisting of 25,760 square feet, better suits the company's needs for its type of specialty operation. The new facility does have 3,640 square feet of surplus office space that Kelsey's Lorimont firm is looking to lease to a prospective tenant.

The former Florsheim building was nearly 100,000 square feet and was built to accommodate a larger-scale operation with dozens of different shoe lines. Cape Shoe's focus is 100 percent American-made boots with a few other shoe styles.

In addition to their regular line of boots and shoes, Cape Shoe is currently making a military boot for the armed forces, many of them used by American solders in Iraq.

The Cape Girardeau business has been nationally recognized for its products, which are unique in that all the materials come from the United States.

Cape Shoe employees about 40 people. The new facility's size and equipment will allow them to increase that to as many as 200.

What others are saying

You know you've made it when you're mentioned in Barron's, like Missouri was in the April 28 issue.

But wait. Sometimes the business magazine takes digs. Case in point was the column that touched upon several states' financial woes:

"While Missouri's economizing measure stacks up as an inadvertent invitation to unleash a new pack of bad jokes -- How many state employees does it take in Missouri to unscrew a light bulb (answer: none; the government has sold off all the ladders) -- the New York Times story on the fiscal woes besetting the states whence it came was rather grim reading."

The column, written by Alan Abelson, cites sources saying that the states are facing the worst budget crisis in history. The column says that the collective state budgetary shortfall will run $70 billion.

Quickly

Owners Chip and Debbie Peterson tell me that CiCi's Pizza is opening Tuesday at 221 Broadview. They ended their letter "CiCi ya later."

Scott Moyers is the business editor for the Southeast Missourian. Send your comments, business news, information or questions to Biz Buzz, 301 Broadway, Cape Girardeau, Mo., 63702-0699, e-mail smoyers@semissourian.com or call 335-6611, extension 137.

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