Welcome music to the ears of Gov. Bobby Jindal and legislators running for reelection comes from a group reporting that Louisiana has fared recently better economically than about two-thirds of the states. But it’s important to understand the relationship between policy and results to assess validly the credit policy-makers may take for this.
The Federal Funds Information for States noted that while Louisiana was slightly below the national average in growth of personal income over the previous year, it ranked 10th in employment growth, 11th in population growth, and tied for the 13th-lowest unemployment rate. All in all, this ranked it 15th overall among the states for the past year.
Just in time for these elected officials to take credit, it reflects most on Jindal as by far he has the most influence on state economic policy as a single individual, even though collectively the Legislature has a lot to say about that as well.
Even though Jindal seems cruising to reelection, some of the eight politically-microscopic organisms running against him have tried to argue he has not made a positive difference in his four years on the state’s economic performance, citing, for example, that the state’s unemployment rate has essentially doubled between the time Jindal assumed office and the latest reporting period.
Yet that figure is meaningless without relating it to the larger context. The fact is, national economic policy largely sets a baseline that state economic policy must operate near in performance. If, as was the case in Congress from 2007- 2011 and has continued today since 2009 in the White House, national policy places more emphasis on wealth redistribution than growing wealth for all, it’s difficult for states to swim against the negative forces this kind of national policy produces.
So the comparative perspective, because in essence it holds national policy constant as an explanatory variable, provides a much more accurate assessment of state policy results. This, indicated by the report, shows the state among the top third and ratifies that Jindal, more than any other official, deserves credit for setting state policy that allowed for this.
Still, extraneous factors due to fortune also affect performance at the state level. One could argue that discovery of the Haynesville Shale geological formation, with its exploitation begun on Jindal’s watch, provided a boost beyond anything policy-makers could provide. However, even here federal policy can attenuate significantly any bonuses like this, and certainly the unwarranted slowdown forced upon the state’s offshore energy exploration by the federal government in the wake of last year’s oil spill disaster that cost the state thousands of jobs and hundreds of millions of dollars in personal income qualifies as that.
So, in the final analysis state policy-makers seem to have done many more things right than wrong over the past four years in economic policy. Which perhaps explains why Jindal drew nary a serious challenger and only 10 incumbent state senators and 38 state representatives will face opponents this fall who are not themselves already incumbent legislators.
Posted by Jeff Sadow at 10:25