Stephen W. Browne | Rants and Raves

Feb/09

6

Looking at the "economic stimulus" from North Dakota

Note: The body of this was written as a newspaper op-ed. I thought it needed to be extended for people who aren’t familiar with the upper midwest.

Since I came to North Dakota last year I’ve covered a lot of government meetings, a couple of elections, and recently some of our district’s legislative forums.

What I found was rather a pleasant surprise to me. The local elected officials I’ve observed and reported on are by and large, competent and decent people (many with their personal quirks to be sure) who are doing a reasonably good job under difficult circumstances. To say the least, it is not always thus in other places I’ve lived.

The reason I think, is that in North Dakota there is essentially no such thing as a full-time professional politician, until you get to the governor or congressional level. Most of our elected officials either have other jobs, or hold an office as a retirement job.*

One consequence of this is, these people know where money comes from.

Let me rephrase that, these folks know where wealth comes from. Money isn’t wealth, money is the bookkeeping system. Wealth at bottom, comes from growing stuff, making stuff, and moving stuff around.

You can’t create more wealth by moving the money around, that only transfers wealth from one person to another. You create wealth only by growing more stuff, making more stuff, or moving stuff to places it’s more useful.

That’s why it’s worrying to me to see how eager some of our elected officials seem about the “economic stimulus” money they’re expecting from the federal government.**

What occurred to me was, this is money from home.

I think most of us remember learning to live on our paychecks when we first went to work. We learned to budget what we made for our rent, food, gas, clothes and stuff we really needed, and maybe even saved a little, before we spent any money on what we merely wanted.

If you were fortunate enough to have parents who were reasonably well-fixed, they might send you money from time to time, maybe after the babies started arriving, or maybe it was just your birthday.

So how did you use that money?

Well, if your finances were in reasonably good shape to begin with, you probably took some of it and did something nice but not necessary for yourself. If they weren’t, you likely got yourself out of that hole temporarily, but didn’t learn to stop digging.

North Dakota’s finances are in pretty good shape. We actually have a billion dollar budget surplus and people are thinking seriously about how to use it wisely and prepare for that proverbial rainy day. That’s why we’re in better shape than most of the rest of the country, so far.

Now it looks like we’re going to get some free money. We can’t just take it and put it away for a rainy day, that’s not allowed. Nor can we replace existing funding for projects we’ve already got going, that’s not allowed either.

We have to think up some new projects to spend it on, and have them shovel-ready RIGHT NOW!

I am personally convinced that the so-called economic stimulus, is nothing of the kind. I think it’s a disaster in the making, and evidently not only professional economists think so, but a majority of the public at large as well.

But I can’t honestly say that I’d recommend the state and city I live in refuse to take the money. Money is money, and if they’re handing it out you’d feel like an idiot if you didn’t get some while the getting was good.

All I’d say is, be careful. Like gambling money, or money from home, this doesn’t feel like the kind that sticks.

And we’d do well to remember this is money, not wealth. It wasn’t made here, it was taken and sent to us from somewhere else.

*North Dakota has a legislature that meets for only one session every two years. Our (Democrat) state senator and (2) representatives for District 24 make it a practice to hold scheduled forums in towns all around the district, every Saturday during the legislative session. They discuss the legislation they’re working on and make themselves available to anyone who cares to come to ask questions.

Few other legislators do this and I must say I’m rather impressed.

**North Dakota is perpetually grappling with a problem unique to the upper midwest and Alaska. The state is about the size of Oklahoma (where I moved here from,) but with a fifth the population. And believe me, it shows in the amenities available out in the sticks.

The largest city is Fargo at about 100,000. (Though actually larger since it sprawls across the Minnesota line into another jurisdiction, and is commonly referred to as Fargo-Moorehead.)

To give you an idea: going west from Fargo across the Interstate to the next largest city Bismarck (the captitol, located at the western edge of the state), you go past two towns of about 7,000 and 12,000, and then across a hundred-plus miles of prairie whose widely scattered towns have populations measuring in hundreds.

Low population density equals thin tax base. The result is, the tax base is apparently inadequate to maintain basic infrastructure. For example how do you pay to build and maintain a paved road from the Interstate to a town that might be 30 to 60 miles away and have a population of 300?

(And by the way, a huge part of those maintenance costs is snow removal.)

In between are farms of course. But with modern machinery, even family-owned farms get larger and larger, because 1) not a lot of people really like to farm anymore, and 2) you have to have a huge acreage to afford a set of farm machinery these days.

The consequence of this is, farmers live at increasing distances from their neighbors. Which makes farm life even tougher, especially on women. Which makes people abandon farming and sell out, which makes the remaining farms larger etc.

North Dakota is a tax-absorbing state. It receives about 50 percent more money in federal aid than it pays in federal taxes.

So what do you do, abandon the state? For the past three generations, that’s what a fair number of people have done. The population has had a steady decline from it’s peak in the early 20th century.

In my gloomier moments I think the only thing that might populate the upper midwest would be disaster elsewhere. The decay of the inner cities might send refugees here, or the eventual reality of nuclear terrorism might motivate a decentralizing of our economy.

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1 comment

  • Ted · February 7, 2009 at 10:47 pm

    Sounds inviting…and I’m not joking!
    Ever since I was a kid raised on a farm, I’ve wanted nothing more than huge amounts of acreage, the equipment and know-how to work it, and miles and miles of nothing but miles and miles.
    I hate city life, but have been economically dependent on it, which sucks.

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