Exchanging & Engaging Ideas in Economics & Economic History
This is not a rant about healthcare legislation, or a lack thereof. It is not even about the ill-conceived sequencing of healthcare legislation and tax reform. My take is that tax reform was more important, would give a chance to generate some bipartisan efforts that could be exploited going forward. I will admit I did not anticipate a leadership crafting bills in secrecy from even their own rank and file.
Many people ask me about the challenges for the North Dakota economy moving forward. This is much more difficult to do than it may seem; there are no easy answers here. There are many reasons for this. What seems to be an problem now may resolve itself of its own accord in the near future. It could also be the case new problems arise as a result of federal policy or technological innovations. As Yogi Berra said, “Predicting things is hard. Especially about the future.”
Yesterday on the radio JT asked about updated numbers from the 2015 post I made earlier this week. Here are the numbers for 2016 annual private wage averages by county from a different source (the Quarterly Census of Employment and Wages).
As part of a deeper look at many factors related to North Dakota economic development, growth, and, for lack of a better term, “transition” I am looking at a broad set of data (even broader than normal). Think of it as a jigsaw puzzle where you do not know the number of pieces ahead of time and do not know the end picture you need to assemble. That is kind of where I am right now. That said, I thought I could share a recent picture I made.
Paul Ryan is pressing hard for tax changes to be permanent rather than temporary (see a representative article here). From a traditional economic perspective he is probably right to do so if he wants policy to have maximum impact on the economy, regardless of your preferred performance metric. There exists no shortage of empirical research on this topic and I include a link here to a research note that seems typical (and more importantly is not paywalled).
The latest numbers from the state OMB showed some interesting information regarding taxes, again. Rather than focus on sales tax this time I thought we could branch out into income taxes. Why? Sales tax revenues get the bulk of attention in the media and from me generally and I think branching out is important. Another reason is as the impacts and effects of the oil decline transmit into other sectors more fully, and the state budget cutting starts to fully take effect, we will see other revenues exhibit declines. My interest in the overall forecasting process, if we can call it that, also means we need to branch out into other revenue areas to understand the complete picture of the revenue process. The individual income tax revenue was also almost $20 million short of the forecast in May. With that in mind here is the picture for actual versus forecast individual income tax revenues in North Dakota:
The conversations on the radio lately deal with a very particular issue with ramifications for Grand Forks and North Dakota in general. Last week the question asked was, “Are we out of money in North Dakota?” By itself I cannot do much with that question, so I choose to rephrase it. I think it better to ask, “Are we hitting up against constraints in North Dakota?”
My posting has been light, well nonexistent, as I am switching to a different web host. That should be finished soon and posting will continue. However, I looked at some labor market data for North Dakota cities and had to put together a quick post.
I am paraphrasing our President in the title obviously. At the point of making too much of a political observation, the President’s comments about insurance could be expanded into many other areas so I cut to the chase and suggest the larger lesson learned should be economic policy in general is not easy.
JT and I are devoting a portion of my weekly appearance to the Grand Forks Flood of 1997, and the business and economic consequences of the event. The consequences of some events are best understood with the perspective of time, and natural disasters are clearly this type of event. For today’s post I chose to look at unemployment, but in a slightly different way.