Nettles Commended for Commerce Stewardship
By Brian E. Clark
MADISON - These are good days to be Cory Nettles, Wisconsin's Commerce Department secretary and the point man for the Badger State's economic rebound. By most metrics, Wisconsin has come back strong from the doldrums of the past few years in which it shed an estimated 75,000 manufacturing jobs.
In the process, Nettles, a 34-year-old attorney who specialized in mergers and acquisitions at the Quarles and Brady law firm, has garnered praise from all corners -- even conservative Republicans -- on some issues.
"I like to get things done," said Nettles, a sometimes intense Democrat who has a fondness for fine cigars – even though his wife rarely lets him smoke them.
"I've spent my entire career helping businesses," said Nettles, a 1996 UW-Madison law school graduate. He recently returned from a weeklong trade mission to Japan with Gov. Jim Doyle and also accompanied the state's chief executive to China in May. "I'm proud to be part of an administration that is pro-business, that is creating jobs, reducing regulatory delays and improving Wisconsin's economy."
Though Nettles, an African-American who was once on track to become head of the State Bar Association, might be considered an ideal candidate for public office, he said he plans to stay for only one term and then return to the business world.
"I do not aspire to be a politician," Nettles said emphatically. "I'm most comfortable in the business sector.
"I like working my butt off to define a bottom line and add value. I'm looking forward to taking the wealth of experience I've gained here – especially as a young guy – and add to the Wisconsin economy again as a businessman."
State Sen. Ted Kanavas, R-Brookfield, is an entrepreneur who worked closely with Nettles on Act 255, a measure aimed at boosting venture capital funding for new high-tech companies.
"Cory gets it," Kanavas said. "We've been able to accomplish things because the Legislature, the business community and the executive branch worked together.
"I've been impressed with Cory's intellect and work ethic," said Kanavas. "He has done well because he has good judgement and knows how to listen. He's been a good influence on the Doyle administration."
Likewise, Russ McCollister, a senior vice president of operation with Georgia Pacific in Green Bay, called Nettles a "very effective" part of the governor's team.
"He has understood the needs of manufacturers large and small and helped put together plans to make Wisconsin more competitive and more attractive to investment," he said.
Wisconsin is the only state in the Midwest to have gained manufacturing jobs in the past year. It added 14,500 positions, up 2.9 percent for the year, with robust growth in rubber and plastics, fabricated metals and transportation equipment. Personal income in the state was also up 3.6 percent in the first quarter of 2004, the largest increase since 2000. Home values increased, too, rising 5.9 percent from the second quarter of last year to a median price of $151,700. And in the financial world, loans are up and bad debts are down for the first half of the year, according to a report by state bank regulators.
Nettles is proud that that the state has gained 63,000 jobs through August, a gain of 2.3 percent in the past year. However, some of those positions do not have the same pay or benefits as jobs that were eliminated. Over the next two-plus years remaining in Doyle's term, Nettles said one of his main efforts will be to create more high-end manufacturing jobs.
"We can't compete with China, India or Mexico for low-end, commoditized manufacturing in which cheap labor is the largest cost driver," he said. "We can't win that race. And we should never have labor rates that are comparable to the third world. Our greatest advantage is in sophisticated manufacturing. That's where we have opportunities and sweet spots.
"We must develop emerging areas like biotechnology, IT and nanotechnology. And we must also do a better job of retaining best and brightest and not be a net exporter of college grads."
Tom Hefty, a prominent Milwaukee attorney and head of the governor's Economic Growth Council, is quick to praise Nettles for his energy and his work shepherding the administration's plans through the Legislature.
"Cory deserves a lot of the credit for the successful 'Grow Wisconsin' plan and working with the Legislature," said Hefty.
"I'd say the last session was the best business development session in two decades," he said. "It rivals Tommy Thompson's first term."
But Hefty isn't sure if Nettles is a good match for public office.
"He's very smart and works very hard, but he doesn't have a high tolerance for bureaucracy," Hefty said. "He is impatient and his kind of 'Type A' personality does better in the private sector."
Nettles' deflects talk about running for office and – echoing boss Gov. Jim Doyle – says despite economic gains he has more work to do because "Wisconsin's economy is not yet out of the woods."
Though he worked closely with Doyle as he ran for office, Nettles said he originally had no intention of joining the Doyle administration.
"I spent a lot of time talking to candidate Doyle about his positions on business in general, economic development, capitalism and capital markets," he said. "I did not want did not want to come into an administration that was going to be antagonistic to business.
"As I listened to his impassioned vision of where he wanted to take the department and the state, I became excited about that. I also came to appreciate the importance of having a very strong and focused executive, which he is," Nettles said.
Though Nettles said it is only natural for the black community to have high expectations for him -- as well as Revenue Secretary Michael L. Morgan, a fellow cabinet member -- he said the Doyle team is working to improve economic conditions for everyone in the state.
The commerce secretary rejected the notion that he has any kind of token position is the Doyle administration.
"The governor's cabinet is very diverse," he said. "But he never had any kind of quotas, he just said 'get me the best people.'"
"What we can promise is that as we are making policies, there will be different perspectives at the table," he said. "And that we will understand who these people are, what their experiences have been, what their history is. And that we are sympathetic to their situation so they will have a level of comfort with us."
Nettles has kept his home in Whitefish Bay, but rents a condominium just down the street from his office at Commerce. In the end, Nettles said Doyle convinced him he could have a major impact helping improve Wisconsin's economy inside the administration.
Tom Still, president of the Wisconsin Technology Network, said Nettles was somewhat of a surprise pick to head the Commerce Department.
"Some people questioned if he had the experience or if he'd be up to it," Still said. "But he has been an energetic and forceful leader."
Still said Nettles proved well versed in the problems facing Wisconsin businesses and "he's been very adept at dealing with the Legislature and a variety of state agencies to get things done."
Still said Act 255, the so-called angel investor legislation, was one of Nettles' bright spots. If all goes as planned, Nettles hopes it will pump about $400 million in additional venture capital into start-up high tech firms around the state over the next 10 years.
"It started out with a specific proposal from the governor," Still said. "Cory was in charge of guiding it through and dealing with a Legislature that had its own ideas.
"But Cory hung in there and made it work under difficult circumstances and also laid the foundation for more that could happen in the next couple of years," he said. "Like a lot of people, I've been impressed with him."
Van Mobley, a professor of economics and history at Concordia University in Mequon, gives the Doyle administration and Nettles muted praise for regulatory reforms, but little credit for restoring Wisconsin's economic health.
"The real reason the economy is rebounding is because Alan Greenspan has kept interest rates low," Mobley said. "I would also give a lot of credit to the Bush administration for tax cuts and spending increases.
"What Doyle has done has had a marginal impact at best," said Mobley, whose campus was visited by the president in May. "But it wouldn't be a central factor. The bottom line is that it is the hard work of the American people that makes the economy go."
Nettles rejects the notion put forth by what he calls "our Republican friends" that the Bush administration is responsible for Wisconsin's turnaround.
"If that were true, you would see the same level of success in Indiana, Illinois, Iowa, Michigan and Minnesota," he said. "I would say Wisconsin has done very well in spite of Bush's economic policies. We might be doing even better, if we had been successful in getting the president's ear on issues that would support our agricultural and manufacturing bases."
He said a victory by John Kerry would help Wisconsin.
"We'll be able to accelerate Wisconsin's turnaround," he said. "Frankly, we've had a hell of a time getting good, positive, constructive policies out of this administration.
"I'd say we are doing well almost in spite of this administration's economic leadership," he said.
The commerce secretary said he believes Wisconsinites' taxes are too high, but he said most of the solutions proposed by state Republicans during the past 18 months were neither "responsible nor thoughtful."
"We might agree on the ends of lowering taxes, but at this point we can't agree on how to get there," he said.
Nettles said he is proud that taxes were not raised and that Wisconsin's $3.2 billion budget deficit – the highest per capita in the nation – was cut. But Nettles said reducing the budget deficit further might be more difficult because "we have picked the low-hanging fruit."
"We are adamant about needing to get taxes down," he said. "But the governor understood in a sophisticated way that there was no single silver bullet and that we could not flip a switch and make this happen overnight.
"We didn't get into this fiscal mess and crisis overnight and we were not going to out of it overnight. All of the Republicans' cute budget and tax gimmicks notwithstanding, our plan is to make the difficult hard, strategic choices that would put us on a long-term track for success."
In addition, Nettles said the state's "bloated" bureaucracy needed to be reduced -- the governor's goal is to cut 10,000 out of 65,000 public jobs, said the secretary, whose own department lost 60 employees, a reduction of nearly 15 percent.
Those cuts have angered state employee unions, who charge that outsourcing of some jobs has actually cost the state money.
Marty Beil, executive director of the Wisconsin State Employees Union, said public workers have been unfairly "scapegoated" by Nettles and Doyle.
"It's false to say the economy has been buoyed by reducing the public payroll," he said. "We may not see problems in the short term, but I don't think people are going to like it when the rivers run brown again because of polluters, when game violators rule the woods, when developmentally disabled youths are out on the streets or when inmates are released early from prison because we don't have enough correctional officers.
"If anything, management is bloated with bureaucrats like Cory Nettles," he said.
Aside from cutting the state payrolls, regulatory reform also ranked high on Doyle's early agenda, as the regulatory environment when he entered office was considered bad for business. Doyle took office in January 2003, and Nettles calls the package that passed that December "the most aggressive and progressive regulatory reform in the country."
Nettles contended the legislation maintains high standards to protect the public health and safety and protect the environment. At the same time, he said it significantly scales back administrative burdens on businesses.
"We didn't hear businesses saying 'lower your standards' or 'let us pollute your rivers, streams and lakes,' it was 'we have to get through your processes more quickly and with greater certainty,'" he said. "What they were complaining about was the transactional costs associated with significant delays and our permitting processes."
Environmental groups such as the Wisconsin Wildlife Federation, the state's largest conservation organization, say they are worried the so-called "Jobs Creation Act" will lower standards protecting Wisconsin's lakes and streams.
"Overall, I think Cory is doing well," said George Meyer, executive director of the federation, and former secretary of the state Department of Natural Resources. "And there is nothing wrong with regulatory reform."
But Meyer criticized Doyle and the Legislature for leaving labor and environmental groups out of negotiations that developed the bill.
"It was a bad bill that was initially proposed," he said. "Eventually, the worst things were removed, but it was not handled well," he said.
"Even with strong Department of Natural Resources rules, we will lose habitat."
Regulatory reform was just part of the move to boost Wisconsin's economy -- Nettles also said the Doyle administration rejects the old employment model that focused on low unemployment to the detriment of all other indicators, including per capita income.
"We think our manufacturing sector has gone through a shakedown," he said. "Now, we want to create a climate here where high-end manufacturers can succeed.
"We want them to start businesses here to expand here and relocate here. We want to make more investment dollars available and upgrade our educational system to train the kind of workers those businesses will need."
Nettles also dismissed as foolish any kind of plan that pits Milwaukee against the rest of the state.
"One thing the governor got, and I appreciate this as a native Milwaukeean, is that this is not a zero-sum game, where you go to northwest Wisconsin and say 'stick it to 'em down in Milwaukee.'"
Nettles said Doyle understands, both intuitively and intellectually, that "as go the fortunes of Milwaukee, so goes the state economy."
"If Milwaukee is booming, that will be a huge boost to our state economy," he said. "If Milwaukee is on a downward death spiral, it will be a huge drain on our state.
"Instead of thumbing our noses at Milwaukee, he asked what could we do to help to Milwaukee's economy become healthy and robust again. Milwaukee has a lot of socio-economic challenges, but creating jobs and making things better there is right for the state as a whole."
Though Nettles said his term at the helm of commerce has been mostly positive to date, he has been frustrated with partisan political skirmishes over god, guns and gays.
"I think Wisconsinites are looking to government to create an environment that grows family sustaining jobs, puts people to work, educates our citizens and doesn't mess around in their personal lives.
"I get impatient when we have to talk about anything other than economic development," he said, showing a brief flash of pique. "We could have done more if we had more support in the Legislature and didn't have to waste so much time dealing with obstreperous (noisily aggressive) blockers."