A story was relayed to me by a Fargo area Republican Legislator during the 2009 North Dakota Legislative session. As that session’s budget was being debated in the house, the North Dakota GOP caucus had a meeting with an economist they respected. He came in to analyze the economy of North Dakota, and compare it to the national economy which was currently in the middle of the great recession.
This valued economist told the House Republicans that North Dakota was on the edge of economic collapse. He theorized that rather than being excluded from the terrible economy that had affected the rest of the country, North Dakota’s own recession was just delayed.
Following this analysis, the Republicans began to make drastic cuts to the Governor’s proposed budget. They wanted to make sure North Dakota did not over commit itself to future spending while at the same time leaving enough money “in the bank” to pay for the inevitable economic downturn coming to the state.
As we all know, that economist and the North Dakota Republican legislators who listed to him were dead wrong. North Dakota never entered into a recession and our economy has continued to grow at an amazing rate leaving our coffers filled with surplus money.
While I do trust the Legislator who told me this story and I do believe he believed that North Dakota was on the edge of economic doom in 2009, the reality is it was a very convenient talking point for Republicans as well. Many long time Republican legislators have told me it was much easier to govern when the state was either projecting a deficit or very limited growth in revenue projections. When money is tight, it is easy to say no to proposed spending, because there is just not enough money to go around.
However, when the state is running a huge surplus, it is much harder to say no to needed infrastructure, law enforcement, schools, and human services. While some notable conservatives will just hold out against any new spending because of a cult like dedication to small government, most Republican elected officials understand there are many needs that should be addressed. The hard work is finding those good projects are and determining the right amount to fund them.
That is why North Dakota Republicans are claiming the sky is falling as they begin to prepare for the 2015 Legislative session. They know that most North Dakotans are aware gas prices are currently low and that the tax revenues could be affected by that. The North Dakota Republicans have begun an apparently coordinated message that the glory days of the North Dakota economy is over.
Just like they said it was in 2009.
However, for every doomsayer in North Dakota, you can find oil industry experts who will tell you oil prices are going to recover. Harold Hamm, the CEO of Continental Resources and perhaps the biggest “Oil Man” in North Dakota has been on record saying that oil will recover to $90 a barrel in no time and the Wall Street has began to predict the oil price free fall will hit bottom soon.
The reality is that people who predict the economy have about the same long term accuracy as those who predict the weather. Nobody knows for sure what the oil price is going to be 6 days from now, much less 6 months or two years from now. In fact, the so called experts in North Dakota have done a very good job at underestimating the size of growth of the North Dakota economy.
I hope everybody keeps that in mind as the North Dakota Republican Party continues there coordinated message against the future of the economy of North Dakota.