Wednesday, December 26, 2012

Barak could learn a lot from North Dakota

Note: The links in the article are theirs, not mine.
While America’s population growth remained flat, an oil boom drew hordes of job-seekers to North Dakota, making it the fastest-growing state over the past year, according to Census Bureau data released Thursday.

North Dakota’s population climbed by 2.17 percent between July 1, 2011, and July 1, 2012 -- a pace nearly three times faster than that of the nation as a whole, the bureau said.
The Peace Garden State wound up with roughly 15,000 more people than it had the year before – largely because of people moving there from other states.
“We’ve all heard about the fracking and oil production and mining. There is a real influx for jobs,” said Census Bureau demographer Katrina Wengert.
North Dakota Commerce Commissioner Al Anderson says the "fastest-growing" designation isn’t surprising, given that the state has been steadily adding jobs over much of the past decade. The state has the lowest unemployment rate in the nation, at 3.1 percent, according to the U.S. Bureau of Labor Statistics.
And it’s not just oil. Agriculture is big business in North Dakota, and advanced manufacturing, technology-based businesses and tourism also have grown, Anderson said.
“We currently have about 22,000 job openings in North Dakota today. Of those, only a third are in our 17 oil-and gas-producing counties,” he said. "It’s more than just oil, but it’s oil that put us on map in the national press.”

Hey Barak, would you rather impose obscenely high taxes on the private owners of the land and the shareholders of the oil- and gas companies, or would you rather see the continuation of a fast-growing regional economy that is doing a lot to help the national economy?

You have to choose, one or the other.  High taxes or high growth.

Which is it?

Now that you've made the sensible choice, why not allow the rest of the economy to grow, by reducing the regulations on American businesses and by reducing the taxes on the people who own and run those businesses?

One of the major problems that North Dakota is facing right now is a serious lack of housing for the influx of job seekers that the oil boom has created. Available rentals are almost nonexistent, and those that do exist are prohibitively expensive.  Hotel and motel rooms as well as campgrounds are full, and many residents of North Dakota towns and cities are renting out rooms to job seekers who have traveled from other states in search of employment opportunities.

Many people are sleeping in their cars because they can't find proper housing. Winter temperatures in North Dakota are often well below freezing, so sleeping in a vehicle can be dangerous.  Crime has also greatly increased in most parts of the state, and many long-term residents are dismayed at what is happening to their communities.  Because housing prices have risen substantially, some homeowners are choosing to sell out and relocated elsewhere.

Those who are lucky enough to get jobs with the oil fields are often able to obtain on-site housing in what is called "man camps."  These are usually no-frills lodging consisting of modular trailers, and workers usually share a room with at least one other person.  Rules are strict in man camps; the use of alcohol or drugs is not tolerated and will result in immediate dismissal. Most oil field employees work 12-hour shifts, seven days per week and work a rotating schedule of two, three, or four weeks on the job followed by two or three weeks off.  During their time off, employees must vacate the man camps.

[... because other men will need the housing while they work.]

A man could use his credit card to buy an RV and fill it with gasoline and food.  He could then drive the RV to a high-paying North Dakota job, live in the RV while he worked, and within a very short time, pay off the loan he used to buy the RV.  Some people are already doing that.

Guess how many smart men, five years from now, will own their RVs without any vehicle loans because they live and work in a fast-growing area like North Dakota.

Now guess how many smart North Dakota RV dealers have been marketing their vehicles to men who are working in the oil- and gas business.

Also guess how many smart North Dakota restaurant owners have been opening their restaurants around-the-clock (and hiring lots of cooks and waitresses, and buying lots of raw food from food producers and distributors) in order to feed the people who have time off from their high-paying oil- and gas jobs?  Restaurants are small businesses, the ones that always do the most hiring.  Don't even think of trying to regulate them out of existence.

Now guess how many smart North Dakota legislators are passing laws designed to keep the oil- and gas jobs growing and thriving in North Dakota through low regulatory burdens and low taxes on the job creators (also known as "millionaires").  North Dakota legislators are reaping a big windfall in tax revenue, not because the tax rates are so high, but because there are so many people paying taxes in North Dakota.

The State of North Dakota received $100 million in tax revenue as of March 2011.

North Dakota is receiving so much tax revenue from the oil- and gas business,, they're considering abolishing all property taxes.  This story is in The Blaze, dated June 12, 2012.

The state of North Dakota has a $1.6 billion budget surplus.  This story appeared on CBS Money Watch on September 20, 2012.

The summary of a message posted on an online message board:

People who work at McDonald's in parts of North Dakota are being paid $15-$20 per hour, and some of them are given a $300 cash bonus, just for accepting the job offer.

Hey Barak, the Federal government didn't force McDonald's to offer that high pay rate and those bonuses, and neither did any union.  The free market did that.

It's called the Law of Supply and Demand, something you should have read about while you were a high school student.  When employees are scarce in a free market, the people who are in a position to offer jobs to the public will be forced, strictly through economics principles, to raise the pay rate for those jobs.  The low supply of potential employees forces employers to raise the demand for those jobs by offering high pay and bonuses.  It's a well-established free-market principle, Barak, but I think you were under the influence of drugs and half-asleep when that class was offered.

Now that you're wide awake, Barak, stop trying to regulate good economies and let them operate without a lot of government-imposed restrictions.  Do that and you'll get more tax revenue out of those businesses than you could ever hope to receive by overtaxing them now.

What part of "It's the economy, stupid" don't you understand, Barak?

05/16/13 update.  This article, dated May 13th, was posted.  It has some advice to the North Dakota government about what to do with all that oil money.

10/03/14 update.  This article on Yahoo, dated October 3, 2014, tells how tkwo families, who were living poorly in other states, moved to North Dakota and became much wealthier.

10/08/14 update.  This article on The Fiscal Times, dated August 28, 2013, says that North Dakota's oil- and tax revenue is now $1.3 billion.

11/12/14 update.  A short article published in Forbes says that North Dakota is the second-best state to do business in.