Look to States - not the White House or Congress - for Economic Innovation

Thursday, 27 Mar 2014 06:39 AM

By Neal Asbury

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If your perception of this country’s economic outlook is based on the depressing news coming out of Washington D.C., you’re missing the big picture.

Innovation, job creation and statesmanship aren't coming out of the White House — they’re coming out of states like Wisconsin and North Dakota, which are unencumbered by flawed federal policies and uninspired leadership.

I recently chatted with Wisconsin Gov. Scott Walker on my radio show "Made in America," and I came away with renewed respect for his leadership.

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Walker’s “Blueprint for Prosperity” has turned a $3.6 billion deficit in Wisconsin into a $2 billion dollar surplus. The word “surplus” has disappeared from our federal government lexicon and has been replaced by exploding levels of debt.

His approach is based on a simple reality — if you lower taxes and initiate reforms instead of implementing restrictive and unnecessary regulations, you can put taxpayers back in charge while putting money in their pockets.

That may explain why Wisconsin’s unemployment dropped by three percentage points and is now 6.1 percent. They are experiencing the best private-sector job growth since the 1990s.

Meanwhile, the national unemployment rate continues to increase as more people are dropping out of the workforce. Millions of Americans are simply giving up.

Unlike other areas of the United States, Wisconsin companies aren’t moving overseas — they’re staying put and hiring local workers. Businesses in surrounding states are taking notice and escaping higher taxes and oppressive unions. They are relocating to Wisconsin.

Walker was vilified for his actions, but other states look at Wisconsin and see opportunity, not the defeatist attitude adopted by many Americans. Once you restore power to employers to create jobs and train workers for today’s jobs, it is the perfect blueprint for economic growth.

Then we can turn to North Dakota, which in 2006, ranked 38th among the states in average personal income. By 2012, it was sixth. Department of Commerce data show that during those six years, North Dakota’s per-capita personal income went from 14 percent below the national average to 25 percent above.

Other states would be doing backflips for these kinds of results. The federal government would be ecstatic if they could emulate even one-third of this achievement.

Yes, part of their success can be attributed to the Bakken shale field, which has helped North Dakota oil production double in the past three years, hitting 769,000 barrels of oil per day. This has helped the state surpass Alaska, California, and Oklahoma and become the country's second-biggest oil producer, after Texas.

Taking this into account, you might suspect that gaining economic success through energy is a no-brainer. But look at states in the Northeast that are sitting on gas deposits while their citizens are at each other’s throats over mining and exploration. As these fights rage over regulation, the money that could have been generated remains under their feet.

By contrast, in North Dakota it takes about 10 days to get a drilling permit. A federal drilling permit takes about 10 months, if a company can even gain access to drilling on federal land.

North Dakota is also embracing more green energies, including supporting thriving wind-energy manufacturing operations for windmills and blades. A high-school friend of mine, a successful recruiter in Pittsburgh, is sending many well-paid automobile engineers and "lean manufacturing" managers from the Midwest (who have been downsized due to unionization) to North Dakota to build windmills. (Editor's note: “Lean manufacturing” is a production practice commonly defined as one considering the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination.)

Instead of bleeding jobs, North Dakota is waging on all-out campaign to attract more workers to the state, targeting thousands of veterans and active military members who will re-enter civilian life.

More importantly, North Dakota recognizes the value in training new graduates and job seekers to be able to gain the skills sets they need to work in the energy industry. Like Wisconsin, they are recruiting from surrounding states.

That may explain why North Dakota is the best-run state in the country for the second year in a row, according to the website 24/7 Wall St. More than 60,000 new jobs have been created, more than $1 billion in comprehensive tax relief has been provided to North Dakota citizens, and more than $1 billion has been invested in strengthening the state’s infrastructure

There are lessons to be learned here.

It starts with getting your priorities straight:
  • put people first;
  • support small business;
  • do not over-tax and over-regulate;
  • don’t be afraid to ruffle some feathers.
It’s no coincidence that the governors of North Dakota and Wisconsin are Republicans.

When leaders are more interested in action than rhetoric, things get done.

If only our president and our Congress started thinking and acting like governors instead of politicians.

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