It is not surprising that all of New Hampshire’s Republican gubernatorial candidates would be required by today’s circumstances to address the issue of job creation, or that their responses to it would trend generally to free-market capitalism. The surprise is that it is the non-politician, non-entrepreneur candidate who possesses the strongest grasp of the issue and therefore the best chance to pursue the appropriate policies.

This past week, I had the great pleasure to join Karen Testerman at a dinner table, discussing how New Hampshire could generate new business and also attract established industries to relocate here. As a thunderstorm rumbled on the other side of the window panes, our twenty-minute interview left few stones unturned in a quest to find lasting, practical strategies for growing the economy and developing jobs.

Immediately, Karen directed our attention to an important point: providing incentives for new businesses must take into account the TYPES of businesses our state needs. Every candidate, no matter the party, will pledge to create jobs – but as has been seen from the Obama stimulus, a nation does not prepare itself for the 21st century by laying down hundreds of miles of asphalt. “Shovel-ready” is not the equivalent of microprocessor-ready. The contemporary marketplace will need to strongly favor newer, clean-technology industries to compete successfully with the global manufacturing universe. Karen correctly identified education as a critical component for this but also understands the serious “brain drain” being experienced by New Hampshire, as information technologists and engineers pursue dreams elsewhere.

New Hampshire’s lack of an individual income tax allows for a personal accumulation of wealth, and the parallel lack of a sales tax allows for the free transfer of that wealth – both are indispensable for a state’s economic future. However, that is not why the entrepreneurs are sitting on their wallets or taking them over the borders. New Hampshire still retains among the highest unemployment insurance taxes in the country, among the highest corporate property taxes in the country, and is the undisputed champion of corporate profit taxes. The message from the “Live Free or Die” state to businesses is unmistakable: get out. And take your jobs with you. With a state population less than a fifth of New York City, why does New Hampshire’s government require so much capital?

The beast needs to be fed. When Right-to-Work legislation failed to pass years ago, state employee unions were able to close their government shops tight and bargain for ever-higher benefits and pensions. The money had to come from somewhere, and since the Democrats in Concord were loathe to cut spending, their favorite money tree became businesses. The state is now among the country’s worst in “value-added” manufacturing (producing things of higher value than the resources used to create them) and “export-focused” manufacturing (producing things for the purpose of selling to extra-state markets). In short, New Hampshire is making cheaper stuff and selling to ourselves. That probably also explains why our state has been among the worst in the number of IPOs created for the last five years.

It does not explain why Karen’s primary opponents, who continuously trumpet pledges to create “jobs,” fail to match her corresponding pledge to create industries – or more precisely, to pursue market-based government policies which will allow industry to create itself. Can the former head of a government agency, who oversaw higher budgets and benefits to his union employees, be credibly expected to successfully resist them once he occupies the corner office? Can an executive for a service sector corporation – without union employees – be credibly expected to appreciate the necessity for Right-to-Work legislation, or technology-based entrepreneurship? Karen Testerman will – and having been an educator herself for many years, is prepared to take them both to school.