When Government Gets In The Way Of Prosperity

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Former North Dakota governor Ed Schafer, writing for Human Events, makes an interesting comparison between the energy industries in California and North Dakota.

Often, when I talk about the positive economic measurements of my state’s economy, someone will say, “sure, but that that’s because you have the oil.” That’s true, but we’re not the only state that is blessed with plentiful energy reserves. The difference is that North Dakota utilizes our resources to better our economy and improve people’s lives.

Let’s compare California, whose citizens suffer a 10.5 percent unemployment rate, more than $20 billion in budget deficits and a crushing $600 billion debt.

The Golden State is paralyzed by excessive taxes and virtually every aspect of its economy, including energy, is restricted by a maze of unnecessary and incomprehensible regulations. California’s misguided policies have caused a “reverse Gold Rush” that has forced 3.4 million Californians to abandon the state over the past two decades. Even now, California continues to lose more than 2,000 high wage earners every week.

Unlike North Dakota, California has refused to take full advantage of the massive economic potential right under the feet of its over-taxed citizens.

California is home to 5 of the nation’s top 12 oil fields and has billions of barrels of oil and gas in reserve. Yet California’s restrictive energy policies have caused production to lag, a leading reason its citizens pay the highest electricity rates and gasoline prices in the country.

I’m often critical of North Dakota’s political leadership, pointing out that they keep taxes too high, spend too much and are far too fond of government-managed economic development schemes. But it’s worth pointing out that they deserve some credit for North Dakota’s energy industry success. No, they didn’t point the oil and gas under North Dakota’s ground, but the state is doing a lot better in California because, unlike California’s leaders, North Dakota’s leadership has largely resisted taxes and regulations crippling to developing those resources.

North Dakota could always do better – they could start by flattening the state’s variable tax on oil extraction – but let’s be glad we aren’t California.

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Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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