America's Most Successful State Economy: ND
There’s no shortage of bad economics news these days. Take your pick: In August there were no new jobs created, retail sales were flat, consumer confidence plunged to recession-era lows, and it was reported this week that the nation’s poverty rate last year rose to the highest level since 1993. Amid all of the national “gloom and doom” there is an amazing story of America’s most successful state economy - North Dakota, and I have been following that story for the last several years.
In my post today at The Enterprise Blog, I outline 8 recent facts about North Dakota’s economy, which is flourishing as a direct result of the booming oil and gas production in the state’s oil-rich Bakken formation. Here's one of those facts:
While the national economy struggles to add jobs in the current "jobless recovery," jobs in North Dakota are increasing at a record-setting pace, and not just oil-related jobs. The overall state employment level reached an all-time high in August and is 9.2% above the pre-recession level in 2007. In contrast, U.S. payroll employment is still 5% below the December 2007 level (see chart).
3 Comments:
Of course, federal outlays exceed revenues by about $6k for every man, woman and child in North Dakota, and probably more than that given recent swelling federal spending.
These are figures from the right-wing Tax Foundation.
North Dakota gets back $1.68 from the federal government for every $1 it sends in.
It is among the most pink, subsidized, mollycoddled, knock-kneed of all rural state economies--floating on a pool of federal lard. In general, rural America is made of of pink states.
Imagine, when a North Dakota family of four sits down, there is $24k of federal dope on the table.
Remember, North Dakota gets two Senators despite a puny population. Ergo, votes are traded for lard.
Federal stimulus spending works--for North Dakota.
I was going to say thanks, Mark, for the optimistic news.
But maybe I should say thanks, Benjamin, for the big wet blanket.
This is great for jobs in ND but not for the investors who are creating those jobs. If you look at the 10-Ks you will find that most of the companies in the shale oil and gas business are cash flow negative and use depletion rates and EURs that cannot be justified by the real world production data. Eventually, the money for drilling that does not produce positive returns will dry up or the cost of oil will explode so much that the small gains in ND will be offset by massive losses in the rest of the economy.
(Keep in mind that if we use the real world data we find that the energy return on the energy invested is close to zero. That is not the basis of a sound economy.)
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