We truly live in odd times.
The bastions of wealth and power are wobbling. New York and California, states with economies larger than nearly every country, find themselves in an economic mire that threatens their ability to function, much less recover. From Maine to Miami and Seattle to San Diego, jobs are disappearing and businesses are shutting their doors.
But what is that gleam on the horizon? Who, in these dark economic times has a growing economy and low unemployment? It’s the Plains States. The “Empty Quarter.” The “Buffalo Commons.” Look around, it is me, and you and your neighbors.
Obviously, it is up to us to pull the nation out if its dire straits and right the economic ship. I am told that the path out of what some are calling the Great Recession is to boost demand. That will invigorate businesses, get factories to reopen, and put people back to work. So for this holiday season, we, the frugal settlers of the Great Plains, need to put aside our usual caution and spend like there is no tomorrow, because it looks like we are the only people with any money left to spend. Together, I know we can party our way to saving the greatest nation the world has ever seen.
I’m joking about that last part, of course. I just wanted to point out that our region is doing very well economically these days and that is something we should all be thankful for.
I saw an interesting animation on the Internet over the weekend that showed how county level unemployment statistics changed over the last two years. Counties with more than 10 percent unemployment were black while those below five percent were bright yellow. The country looked like it was rotting from the edges to the center, like a piece of food left out and going bad. But there was a pulsing golden heart in the center, stretching from Canada to Nebraska. Beulah sits near the middle of that band of relative prosperity.
There are a number of reasons for this. I think the biggest reason is our region has always had a counter-cyclical economy. What has been good for General Motors has rarely been good for North Dakota. I have long said that farmers do better during the bust because most of them went broke during the boom.
We are a commodity producing state. We send grain and oil elsewhere to make things that are worth much more money. We compete globally, with barley from Europe, soybeans from South America and oil from what seems like every two-bit dictatorship in the world.
For decades, the power of the rest of our economy has kept the dollar strong against the other currencies of the world. That was great for the consumers on the coast because they could feast on cheap wheat and cheap oil from anywhere. But here in the heartland, we had to compete not only with other producers but also with their devalued Euros and yen.
Well, the U.S. economy finally laid an egg. As American companies got shakier, foreign investors didn’t want dollars to invest here so they had no need to buy dollars. I haven’t checked recently, but I know at one point the dollar was worth about 30 percent less against other currencies than it used to be. That sucks for the coasts, because it means their imported furniture, imported food and imported oil are now a whole lot more expensive. They cost the same in Euros, but most of us don’t get paid in Euros.
This has hurt companies that rely on imports for their raw materials. But for places like North Dakota, who produce those raw materials, it has been a boon. That bushel of wheat has always been worth two Euros but has gone from being worth $3 to $5. It’s the same situation with a barrel of oil.
So it is an ill wind that blows no good. Those of us who have an opportunity to prosper during these hard times should take a lesson from the pain being suffered by the nation as a whole and put something aside for a rainy day. Our economy tends to be counter cyclical, but it is not totally disconnected from the national woes. Bobcat has laid off workers in Bismarck as has Cirrus in Grand Forks. Even the top deck of a sinking ship will eventually get wet.
So enjoy your holidays and do your part to help kickstart the economy. But always keep a weather eye peeled because there are dark clouds to either side of us.
Far Afield – North Dakota to the rescue
We truly live in odd times.