Mr. President: Economic Growth Lessons from America's North

President Barack Obama's "Grand Bargain" tour is underway, with plans for Air Force One to drop the commander-in-chief at various locales across the fruited plain so he can campaign for his pie-in-the-sky economic proposals.  Among other proposals supposedly meant to revive the Obama-led stagnant economy, he's clamoring for an increase in the minimum wage, to build new roads and bridges, and to create additional government programs.

These and his other ideas are nothing more than an attempt at artificial economic and wage growth through government-mandated spending or wage increases.  These same types of proposal have contributed to our current sluggish economy.  Nothing new to see here.

Were the president actually serious about turning his economy around, a blueprint exists in our own backyard.  It has produced massive economic and wage growth and the corresponding building of new infrastructure, and it's not based upon government spending or mandates. 

Instead, it's market-driven, and it can be seen some 2,000 miles from Washington, D.C. 

It's called North Dakota.

The economic contrasts between North Dakota and the overall nation are stunning.  While 14.0% of Americans are underemployed and only 63.4% of Americans are actually in the labor force, companies and organizations are begging for workers in the Roughrider State.

That has resulted in North Dakota's unemployment rate dropping to a meager 3.1%, the lowest in the nation, and well below the 7.4% official national unemployment rate.  It should then come as no surprise that the state's largest city, Bismarck, has the lowest unemployment rate among American cities -- a mere 2.8%.

The demand for workers is so strong that even a McDonald's restaurant had to recently delay its opening due to a lack of staff.

Even with wages climbing to $15, $20, or more per hour in these traditionally low-paying jobs, it's still tough to fill these positions.

These are the "minimum wages" in North Dakota, and they are upwards of double the national minimum wage rate.  Impressive, indeed.

What does this illustrate?  Strong economic growth produces a far higher "rising tide" of minimum wages than does a government mandate.

Simply put, there aren't enough people in North Dakota to fill the myriad of open jobs.  Supply is low and demand is high, thus pushing wages higher.

That sounds nothing like the country as a whole, so it stands to reason that perhaps, just perhaps, it might be wise to try replicating North Dakota's success across America using the same methods.

The economic boom in North Dakota has been fueled by an oil rush.  Enhanced fracking technology has allowed drillers to access oil reserves in the Bakken Shale, an enormous rock formation that extends from Canada down into the northwest section of the state.

Unlike in the Arctic National Wildlife Refuge (ANWR) or offshore, the drilling that's taking place in the Bakken Shale is on private property.  Therefore, as you might expect, there is far less red tape to cut through in order to access the oil.  The Institute for Energy Research estimates that the time required to process a permit to drill for oil on federal lands in 2012 was, on average, 307 days.  It took a scant 10 days to get a permit to drill on private property in North Dakota. 

That little amount of bureaucracy has allowed for rapid and  phenomenal economic growth in the region.  Indeed, North Dakota had the highest level of economic growth among the fifty states in 2012 and could very well again this year.

After all, if you're in the oil business and you have a choice between fracking in North Dakota, where you can get a permit in just over a week, or attempting to drill offshore, while having to wait for nearly a year just to see if you'll be allowed to drill, which would you choose?

Therein is a perfect example of how excessive government regulation can stymie economic development and how an efficient government can contribute to economic growth.

ObamaCare, the very definition of excessive government regulation, continues to be the chief regulatory stranglehold on the economy as a whole.  A simple repeal of the law would provide an immediate injection of economic revival.

Our own Federal Reserve has essentially said the same.  In a Heritage Foundation report released in May titled "Red Tape Rising:  Regulation in Obama's First Term," the authors cite an April economic report from the Fed.  It states, "Employers in several districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire staff."

It doesn't get much simpler than that in showing how massive government regulation chokes economic growth.

The phenomenal spike in North Dakota's economic growth has spilled over into a variety of industries in the area.

According to a Businessweek article from earlier this year, First International Bank, which has several branches in North Dakota, added 65 additional staff last year and plans to add 30 more in 2013. 

It's that type of peripheral job-creation in other industries that could be accomplished if, as an example, the president stopped delaying the Keystone pipeline project. 

His own State Department estimated that the project would create 42,100 jobs.  Some of those would be construction jobs, some part-time, and some in peripheral industries.  That's a lot of jobs, and jobs desperately needed.  Yet Obama's allegiance to the environmental crazies trumps common sense.

Even more impressive in North Dakota are the words from our own Department of Labor in describing what has occurred in counties within and near the Bakken Oil Shale.  In a piece released earlier this year, the Department said, "From 2007 to 2011, employment in these counties grew from 77,937 jobs to 105,891 jobs, an increase of 35.9 percent. Total wages paid in these counties more than doubled over the same period: in 2007, workers in these counties earned about $2.6 billion, and in 2011 they earned $5.4 billion. Their average annual pay increased from $33,040 to $50,553 for an increase of 53.1 percent."

Compare that with how the Department described the national scene: "Over the same period, national employment decreased by 4.4 percent, while average annual pay increased by 8.1 percent from $44,458 in 2007 to $48,043 in 2011."

Oh, and how about all those roads and bridges that Obama proposes we build in order to supposedly spur economic growth?  Well, in North Dakota, thanks to the market-driven economic growth and corresponding new jobs and increased wages, there has been a massive influx of tax dollars to pay for such roads.  Road construction is rampant throughout the major arteries in and around the Bakken Oil Shale. 

Apparently the folks in North Dakota believe that building new roads and bridges can be done simply by collecting new tax dollars generated by economic growth.  That's a novel idea: produce economic growth first and then enhance the needed additional infrastructure.

North Dakota: the blueprint for economic growth in America, and a standout against the rest of the Obama-led economy.

had Stafko is a writer and political consultant living in the Midwest.  He can be reached at stafko@msn.com.

President Barack Obama's "Grand Bargain" tour is underway, with plans for Air Force One to drop the commander-in-chief at various locales across the fruited plain so he can campaign for his pie-in-the-sky economic proposals.  Among other proposals supposedly meant to revive the Obama-led stagnant economy, he's clamoring for an increase in the minimum wage, to build new roads and bridges, and to create additional government programs.

These and his other ideas are nothing more than an attempt at artificial economic and wage growth through government-mandated spending or wage increases.  These same types of proposal have contributed to our current sluggish economy.  Nothing new to see here.

Were the president actually serious about turning his economy around, a blueprint exists in our own backyard.  It has produced massive economic and wage growth and the corresponding building of new infrastructure, and it's not based upon government spending or mandates. 

Instead, it's market-driven, and it can be seen some 2,000 miles from Washington, D.C. 

It's called North Dakota.

The economic contrasts between North Dakota and the overall nation are stunning.  While 14.0% of Americans are underemployed and only 63.4% of Americans are actually in the labor force, companies and organizations are begging for workers in the Roughrider State.

That has resulted in North Dakota's unemployment rate dropping to a meager 3.1%, the lowest in the nation, and well below the 7.4% official national unemployment rate.  It should then come as no surprise that the state's largest city, Bismarck, has the lowest unemployment rate among American cities -- a mere 2.8%.

The demand for workers is so strong that even a McDonald's restaurant had to recently delay its opening due to a lack of staff.

Even with wages climbing to $15, $20, or more per hour in these traditionally low-paying jobs, it's still tough to fill these positions.

These are the "minimum wages" in North Dakota, and they are upwards of double the national minimum wage rate.  Impressive, indeed.

What does this illustrate?  Strong economic growth produces a far higher "rising tide" of minimum wages than does a government mandate.

Simply put, there aren't enough people in North Dakota to fill the myriad of open jobs.  Supply is low and demand is high, thus pushing wages higher.

That sounds nothing like the country as a whole, so it stands to reason that perhaps, just perhaps, it might be wise to try replicating North Dakota's success across America using the same methods.

The economic boom in North Dakota has been fueled by an oil rush.  Enhanced fracking technology has allowed drillers to access oil reserves in the Bakken Shale, an enormous rock formation that extends from Canada down into the northwest section of the state.

Unlike in the Arctic National Wildlife Refuge (ANWR) or offshore, the drilling that's taking place in the Bakken Shale is on private property.  Therefore, as you might expect, there is far less red tape to cut through in order to access the oil.  The Institute for Energy Research estimates that the time required to process a permit to drill for oil on federal lands in 2012 was, on average, 307 days.  It took a scant 10 days to get a permit to drill on private property in North Dakota. 

That little amount of bureaucracy has allowed for rapid and  phenomenal economic growth in the region.  Indeed, North Dakota had the highest level of economic growth among the fifty states in 2012 and could very well again this year.

After all, if you're in the oil business and you have a choice between fracking in North Dakota, where you can get a permit in just over a week, or attempting to drill offshore, while having to wait for nearly a year just to see if you'll be allowed to drill, which would you choose?

Therein is a perfect example of how excessive government regulation can stymie economic development and how an efficient government can contribute to economic growth.

ObamaCare, the very definition of excessive government regulation, continues to be the chief regulatory stranglehold on the economy as a whole.  A simple repeal of the law would provide an immediate injection of economic revival.

Our own Federal Reserve has essentially said the same.  In a Heritage Foundation report released in May titled "Red Tape Rising:  Regulation in Obama's First Term," the authors cite an April economic report from the Fed.  It states, "Employers in several districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire staff."

It doesn't get much simpler than that in showing how massive government regulation chokes economic growth.

The phenomenal spike in North Dakota's economic growth has spilled over into a variety of industries in the area.

According to a Businessweek article from earlier this year, First International Bank, which has several branches in North Dakota, added 65 additional staff last year and plans to add 30 more in 2013. 

It's that type of peripheral job-creation in other industries that could be accomplished if, as an example, the president stopped delaying the Keystone pipeline project. 

His own State Department estimated that the project would create 42,100 jobs.  Some of those would be construction jobs, some part-time, and some in peripheral industries.  That's a lot of jobs, and jobs desperately needed.  Yet Obama's allegiance to the environmental crazies trumps common sense.

Even more impressive in North Dakota are the words from our own Department of Labor in describing what has occurred in counties within and near the Bakken Oil Shale.  In a piece released earlier this year, the Department said, "From 2007 to 2011, employment in these counties grew from 77,937 jobs to 105,891 jobs, an increase of 35.9 percent. Total wages paid in these counties more than doubled over the same period: in 2007, workers in these counties earned about $2.6 billion, and in 2011 they earned $5.4 billion. Their average annual pay increased from $33,040 to $50,553 for an increase of 53.1 percent."

Compare that with how the Department described the national scene: "Over the same period, national employment decreased by 4.4 percent, while average annual pay increased by 8.1 percent from $44,458 in 2007 to $48,043 in 2011."

Oh, and how about all those roads and bridges that Obama proposes we build in order to supposedly spur economic growth?  Well, in North Dakota, thanks to the market-driven economic growth and corresponding new jobs and increased wages, there has been a massive influx of tax dollars to pay for such roads.  Road construction is rampant throughout the major arteries in and around the Bakken Oil Shale. 

Apparently the folks in North Dakota believe that building new roads and bridges can be done simply by collecting new tax dollars generated by economic growth.  That's a novel idea: produce economic growth first and then enhance the needed additional infrastructure.

North Dakota: the blueprint for economic growth in America, and a standout against the rest of the Obama-led economy.

had Stafko is a writer and political consultant living in the Midwest.  He can be reached at stafko@msn.com.