Friday, April 28, 2017

First Quarter 2017: GDP Growth Still Weak

Today is an exciting day! The first GDP growth numbers are in for 2017. This morning the Bureau of Economic Analysis released an advance estimate of the U.S. economy for the first quarter. Compared to the first quarter of 2016, Gross Domestic Product increased by 1.92 percent, with private consumption reaching a mildly cheerful 2.77 percent.

Neither number is impressive by historic comparison, but they are appropriate in one way: this was the last quarter when the economy was affected by the Obama administration's tax-and-regulate policies. From hereon, it will be President Trump's economy.

Thursday, April 27, 2017

What Professions Lose Most Jobs?

I have reported on several occasions about the labor market situation in Wyoming, and it is not a pretty picture. For example, in the past two years we have lost 16,700 private-sector jobs, half of them outside the minerals industry.

The usual way to look at the jobs situation is to do it either by industry or by county. There is a third set of statistics, namely employment by occupation. This type of statistics is hard to come by, especially at the state level; the volume of statistics needed to produce each update is, simply, humungous. It is also a matter of collection method - this type of statistics essentially relies on individual data, as opposed to data at the industrial level. 

Tuesday, April 25, 2017

Private Sector Resilient in U.S. Economy

The Bureau of Economic Analysis has released fourth-quarter GDP numbers for the U.S. economy. It is the first of three important sets of GDP data from the BEA; the next big number is the advance estimate of GDP growth for the first quarter of 2017, which we can expect on Friday. Then on May 11 the BEA releases fourth-quarter GDP data for the states. That release is going to be very important for the reassessment of our state's dire straits. 

Best of all: the May 11 release coincides with the Revenue Committee meeting in Saratoga on May 11-12. 

Monday, April 24, 2017

What Caused Recent Rise in Coal Production?

Never bark at the Big Dog. The Big Dog is always right.

In a Casper Star Tribune article from Sunday, Wyoming Mining Association Director Travis Deti explains that the coal industry is not "self correcting", in other words will not bounce back to historic heights. We are, he says, "going to see a new normal as far as coal production".

See, I told you so. Wyoming, as an economy, is in a new normal not just when it comes to the minerals industry, but in every other aspect - except government. Our state and our local governments have yet to adjust themselves to this new economic reality.

Sunday, April 23, 2017

Another Argument for Privatizing UW

Back in December I made the case for privatizing the University of Wyoming:
Academic performance is at the epicenter of the private-vs-public issue. Again, I am sure the faculty at UW is doing a fine job educating their students, and the Wyoming workforce is full of UW graduates who excel in their professions of choice. Nevertheless, good can always become better: private universities consistently rank higher than public universities. Of the top-20 ranked universities in the country, only one is a public school, namely University of California at Berkeley, which is tied for 20th place with Georgetown and Emory. The University of Wyoming is ranked 171st. 
There is also a fiscal side of the privatization argument.

Thursday, April 20, 2017

Seven Questions for Our Next Governor

It is more than a year and a half before it is time to elect our next governor, but we can already see the contours of the field of candidates. According to the Casper Star Tribune, the following names are in the hat:
  • Secretary of State Ed Murray;
  • Former U.S. Representative Cynthia Lummis;
  • State Treasurer Mark Gordon;
  • Former State House Speaker Ed Buchanan;
  • Darin Smith, who challenged Liz Cheney in the 2016 primary for Lummis's seat; and
  • The irreplaceable Taylor Haynes.

All these potential candidates would make good governors, each one in their own different way.

Wednesday, April 19, 2017

The Big Cost of Local Governments

Wyoming is increasingly building a reputation for a big-government state. In fact, already in 2004 we were known to be right up there with Alaska (and the District of Columbia). Since then, we have kicked the Frontier State down from the throne, and we did it in good part thanks to the surge in local government employment: in Governor Freudenthal's second term alone, local governments expanded their employment by more than 14 percent.

This is a big problem for our state's future: it is not just the state government that must downsize itself permanently, but our local governments will have to do the same.

Tuesday, April 18, 2017

Alaska Today, Wyoming Tomorrow?

As I explained yesterday, the vote by the Alaska State House to pass an income tax bill brings Wyoming one step closer to doing the same. The Alaska Senate has yet to vote on HB115 - they are in recess until tomorrow morning - but there is a fair chance that they will pass the bill, as the option would be to enact major cuts to spending.

The latter would be preferable, if done predictably and with the goal of expanding economic freedom. However, until we see otherwise, it is prudent to assume that the income tax is coming to Alaska.

Monday, April 17, 2017

Alaska Closer to Income Tax

Updated: The tax brackets were erroneously reported partly as single-filer income. That has been corrected. Apologies for the confusion. 
The Last Frontier, up there on the other side of Canada, has been in a budget crisis about a year longer than Wyoming. Almost since he was elected, Governor Bill Walker has been warning the state legislature about the threat of an income tax unless they could unite around major spending reforms. Well, the legislature could not unite around anything more than marginal spending adjustments - and guess what:

Wednesday, April 12, 2017

EAD Admits: Crisis Not Over

Never bark at the Big Dog. The Big Dog is always right. 

Over the past four months I have been publishing article after article explaining:
  • that our state is in a long-term macroeconomic decline;
  • why this is no longer primarily a minerals crisis; 
  • how the downward trend is tapering off and being replaced by a new, lower-activity "normal"; and
  • the reasons why this does not precipitate a recovery.
For a series of my articles on the macroeconomic situation here in Wyoming, click here. Also, click here for articles on the jobs trend (apologies for overlaps).

Tuesday, April 11, 2017

Wyoming in an Egalitarian America

I have explained how Wyoming, from an economic viewpoint, is not at all the liberty-minded state we often portray it to be. However, the current economic crisis in our state is a golden opportunity for us to advance economic freedom, downsize government and give traditional free-market forces a prominent role in shaping the future of our state. 

There are, of course, pressing fiscal reasons to do this, with the state's runaway deficit at the forefront. But there is also a more long-term perspective on our state's future that we need to take into account.

Monday, April 10, 2017

The Wyoming Economy: Facts and Fiction

When we discuss the Wyoming economy, it is important that we use the relevant kind of data. For understandable, but erroneous, reasons people tend to rely on the unemployment figure as a key indicator of how well or poorly our economy is doing. As a matter of fact, Wyoming is a very good example of how this particular variable can be directly misleading.

There is also a lot of conventional wisdom floating around in the discussion about our economy.

Friday, April 7, 2017

Long-Term Trends in Coal Consumption

A short note today, focused on demand for coal. We all wish the coal industry the best, and we are all grateful to Representative Cheney for her work to make life easier for our state's coal industry. Lifting regulations on private-sector economic activity is inherently good. 

At the same time, the long-term trends in coal consumption are no source of optimism regarding the future of coal.

Thursday, April 6, 2017

School Choice: An Economic Winner

There are many reasons why parents should have the last say in their children's education. For one, it gives them the status they have the right to as free, independent people; having grown up in a country (Sweden) where the government had the right to educate your child, and parents were arrested and charged with a crime if they tried to homeschool their kids, I deeply value this aspect of school choice.

In addition, there are many economic reasons why it is better to have a market for K-12 education:

Tuesday, April 4, 2017

Wyoming! Wake Up and Smell the Coffee!

The School Funding Recalibration committee meeting in Casper, WY apparently went better than expected. There was little talk about raising taxes, although that may simply be a smart tactical maneuver by the committee. In fact, with some notable exceptions there were a lot of heads stuck in the sand up there in Casper...

The Casper Star Tribune reports:
Lawmakers and educators met Monday to begin the process of adjusting — or fully replacing — the state’s education funding model, which faces a $400 million annual shortfall in the coming years. 
So now it is only $400 million...? I guess the $1 billion scare tactics did not work.

Monday, April 3, 2017

The Tax Well Is Drying Up

Today, the School Funding Recalibration committee meets in Casper to discuss the funding of our K-12 schools. Since the committee is called "funding recalibration", we probably should not expect them to come up with constructive ideas for school choice reform. 

A much safer bet is that they will present a list of tax increases, possibly also new taxes. 

Last week the Bureau of Economic Analysis (BEA) released another set of macroeconomic data that shows why Wyoming cannot afford higher taxes.

Sunday, April 2, 2017

Freedom Caucus Opens for Single Payer

Many of you will not like what I have to say in this blog article, but I am not in this to become popular. I tell it as I see it, based on my years of experience, my scholarship and my commitment to classic libertarian values.

While President Trump and the Congressional Republican leadership were fighting for the American Health Care Act, there was a lot of support from libertarians and conservatives for the Congressional Freedom Caucus as they resisted the bill. For example, on March 22 the Washington Post reported