4/21/2001
KUFM / KGPR
T. M. Power
“Jumpstarting” the Montana Economy Helena Style
The Montana Legislature has finally packed its bags and headed home leaving behind a confused jumble of legislation, endorsed by the Governor, that they claim will “jumpstart” the Montana economy. Their primary tools for this undertaking have been to weaken environmental legislation, cut the taxes paid by large out-of-state corporations, and starve “non-essential“ public services such as the education for our kids.
It is a familiar economic program since the same folks have been in control of state government for 13 years now. If the Montana economy has fallen increasingly into trouble, as they claim, one would assume that they would want to take some responsibility for that fact. One would also assume that we and they would have learned something about the effectiveness of their particular economic development prescriptions. If, as they say, the Montana economy has deteriorated over the same period they were implementing their anti-environmental, pro-corporate, anti-education programs, why do they insist that “more of the same” is the cure for problems that occurred on their watch? Are we that slow as learners?
It is true that the Montana economy has deteriorated over the last year. But it is the very people who tell us they are going to jumpstart the economy who put the electric deregulation gun to the state’s economic heart and pulled the trigger. The Bureau of Business and Economic Research at the University of Montana’s Business School has estimated that higher electric costs have cut the rate of expansion of the Montana economy in half. Single handedly our industrial elite and their self-described lap dogs have arranged to shut down most of the state’s industrial base. Instead of jumpstarting the economy, they have been pouring sand into the crankcase and then blaming environmental regulation and spending on schools for the economic problems they themselves created. And these are the folks who talk constantly about government accountability!
But let’s back up a bit because the Alice in Wonderland aspect of this political performance goes further back than just the recent electric deregulation catastrophe. Just what was all this talk of “jumpstarting” the economy all about? Was it the performance of the Montana economy during the 1990s about which they are concerned? That the economy had been expanding too slowly? That we were unable to support our population? That the national and regional economic expansion of the 1990s “passed us by”?
Although all of these claims have been made, none of them are true. Consider the facts. During the 1990s Montana was 10th in the nation in the rate of job creation.[1] We were 13th in our ability to both hold on to our population and attract people from other states. We were 20th in overall population growth, almost joining the elite ten percent of the states that gained a congressional representative. We did this despite the fact that three quarters of the state lies in the Great Plains region of the nation that has been losing population for most of the 20th century.
So what is this talk of a failing economy all about? Do we need still more job growth? If being 10th in the nation in job growth was not enough to raise wages to the levels we would like, would rising to 5th in the nation do it? That would put us where Idaho is, but Idaho’s average pay was 22 percent below the national average, ranking 5th lowest in the nation. Maybe we have to shoot even higher, say 2nd fastest rate of job creation in the nation. That would put us where Utah is, but Utah also had pay almost 20 percent below the national average, 12th lowest in the nation.[2] Both of these rapidly growing neighboring states have been so successful at high tech industrialization that they make states like Montana drool, but that success has not solved the problem Montana politicians complain the most about, relatively low pay.
Jumpstarting the Montana economy to many of our politicians really means jumping backward, trying to turn the state back into a mining, smelting, and lumber state. That, they tell us, would boost our pay. But pay in those industries has been falling faster than pay in the service sectors. In fact, it is plunging pay in those “good jobs” that is partly responsible for the overall decline in relative pay in Montana. Besides, technological change has been eliminating jobs faster in these industries than in almost any other, not a very reliable place to hang the state’s economic future.
So what is to be done? First, abandon the panic talk. Our economy is not collapsing, despite legislative efforts to mandate industrial decline and household impoverishment through electric deregulation. Our economy has shown considerable economic vitality and will continue to do so. Second, invest in the future. That means protecting that which is unique and most attractive about Montana. That certainly includes our natural landscapes, wildlife, fisheries, air and water quality. It is these things that have held us here, and we need to have the confidence that the choices we made to live here were good ones. We have to stop degrading Montana in a self-defeating attempt to bribe polluters into creating a few more jobs.
It also means investing in our children through education. These are “cannot lose” strategies since we know that education has a high economic payoff both for regions and for the individuals who receive that education. The same is true of protecting the uniqueness of Montana’s landscapes. That has been the chief source of our economic vitality and will continue to be so in the future. Again, we cannot lose: Those of us living here get the benefits no matter what and, in addition, it supports ongoing development of the Montana economy. Of course, as important, we would also be fulfilling an ethical obligation we have to this place and to future generations.
For over a decade, our political and industrial leaders have been following the very opposite strategy in a failing effort to gain short term economic advantage by retreating from our constitutional commitments to this magnificent place, our children, and our children’s children. This is doubly tragic because it is both wrong and will not work.