LA economic performance validates conservative policies
It’s tough being an economic leftist in Louisiana these days. After five years of economic mismanagement, from whatever the motivation, by Pres. Barack Obama and Democrats in Washington, with so little to defend at the national level, liberals in the state turn to its economic performance to try to restore their faith in their untenable ideology. But while the state as whole got more good news on that front last week, to them it simply was more of the bad variety.
It turns out that the state set a jobs record last month, getting pretty close to two million employed. Better, it came as a result of strong private sector hiring in the face of small declines in public sector jobs. That makes the state only one of 14 that has added jobs since the recession began in 2008 followed by the Obama-inspired jobless “recovery,” and has done so now for three straight years. Even the only potential negative to this report, the unemployment rate higher than last year is because the workforce has expanded so significantly, and that rate of 7 percent still is below the national rate of 7.3 percent where the expansion of the workforce has been much slower, if not retracting, than Louisiana’s.
Add to this a rising household median income that is among the fastest in the nation which has gained 4.2 percent over the past dozen years while the nation’s has fallen 6.6 percent – with this drop essentially all during the Obama presidency – and a slowly but continuously falling poverty rate over the past few years even as Obama’s economy continues to create more poverty nationally. At the current rates of change, by the next decade Louisiana’s poverty rate will be lower than the national average and by the end of that decade its median income will be higher.
Most remarkably about this turnaround, where the effects of the only beneficial exceptional and unanticipated event of the past few years, shale gas discovery and extraction, wore off a couple of years ago with a steep decline in natural gas prices, is that it has come swimming against the tide of economic sludge coming from the liberal policy of the White House. State economic performance from a policy perspective is perhaps only a third controllable by state policy-makers, with the other two-thirds captive to national economic forces. Absolute falls in the poverty and unemployment rates and rises in the workforce and media income would have been much higher had the last five years featured Democrats in power who instead put empowering people and households over empowering government.
But note that faith avoids facts, and thus we get the likes of the leftist Louisiana Budget Project doing its utmost to find that dark lining to the silver cloud. Its director, former newspaper reporter Jan Moller, obsessed on Louisiana’s ranking third highest in poverty still and sniffed “Whether we are first, second or third, I don't think it's a reason to celebrate.”
This fit the narrative of a recent report issued by the group that does its level best to downplay the state’s obvious economic success of the past few years. The report deliciously came out right before the latest data that served to blunt many of its points, which were presented either in a negative way isolated from the larger picture, or featured puerile analysis.
For example, it emphasized that the state’s unemployment rate was ticking up over the beginning of the year while the nation’s was creeping down – without discussing the facts why Louisiana’s had been so much lower for the three preceding years or noting the state rate in increasing because of an increased labor pool while the national rate is decreasing because of a decreasing labor pool. Yet it paradoxically also suggests hidden labor market weakness as a “smaller percentage of adults are working than before the recession. This indicates that many … who had jobs before the recession have left the labor force and stopped looking for work due to the lack of adequate job openings.”
However, that completely misinterprets the entirety of the data, for the latest confirm that the workforce, with small starts and stops here and there, essentially has been expanding for years – as opposed to the national level. More validly, they have opted out of the workforce in Louisiana and nationally because national Democrats have created greater incentives not to work, such as relaxing eligibility requirements for Social Security disability pay, reception of food stamps, and unemployment insurance.
It also laments higher productivity from workers yet much smaller increases in wages. Again, that view puts ideology before reason: in a business environment where costs other than labor continued to be increased by Democrat-controlled government fiat of the recent past and present, such as higher taxes, increased regulation, and the advent of the massive costs increases on the horizon courtesy of the Patient Protection and Affordable Care Act, of course squeezing business this way obviates much chance to pass along higher wages to their workforces.
While the report renders other instances of bad analysis and judgment, perhaps the most remarkable aspect to it is how it tap dances constantly around the fact that Louisiana, under a Republican governor since 2008 and effective conservative majorities in the Legislature since 2010, has done so much better than many other states in the past five years. Phrases along the lines of “Louisiana was fortunate to dodge some of the worst” and “Although there has been an encouraging spate” litter the document, yet it makes no serious effort to understand why that was the case.
Posted by Jeff Sadow at 09:05