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Thursday, April 16, 2009

South Dakota 5th in Economic Competitiveness? Show Me the Money

I'm always happy to hear South Dakota get good press. And I certainly can't complain if a study says we might get out this recession sooner rather than later.

Well, actually, yes I can.

The South Dakota press gave much attention yesterday to a new (well, sort of: the press release came out March 19) study, "Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index," which ranks South Dakota fifth in the nation for "economic competitiveness." We stand with Utah, Colorado, Arizona, and Virginia as the states "best positioned to make a recovery" from the recession.

I hope so! I don't wish a lengthy recession on any other states, but if South Dakota can find its way out and up sooner, and if other states follow our lead for once, then boo-ya awesome!

Unfortunately, this "study" is not just a study. It's advocacy. Catch that subtitle again: "ALEC-Laffer." ALEC, as in American Legislative Exchange Council, conservative lobbying group and ghostwriter of business-friendly legislation. Laffer, as in Dr. Arthur B. Laffer, Mr. Trickle-Down from the Reagan Administration. This "Economic Competitiveness Index" is a lot like the much ballyhooed "Freedom Index" that came out last month praising South Dakota: it's an ideological argument, not a scientific study.

Let's submit this conservative advocacy to a reality test: We keep hearing from ideologues like ALEC and Laffer that our no-taxes, no-regulation legislative attitude is great for business and the economy. But where are the businesses voting with their capital to back these assertions? We're one of the best places to do business, but we still don't have a single Fortune 500 company headquartered here. (High-tax California, which ranks 43rd on the competitiveness index, has 52 F500 HQ's; the People's Democratic Republic of Minnesota ranks 40th and has 19.)

I want to celebrate good news as much as my neighbors. But the ALEC report is not news; it's wishful thinking that doesn't square with the facts. If low taxes and laissez-faire government were all it took to attract businesses, South Dakota would be kicking Minnesota's behind in economic development. South Dakota may be fifth by the metrics various ideologues can come up with, but by the metric that matters, the votes businesses cast with their dollars and their feet, South Dakota still has a lot of catching up to do.


  1. Boasting about our low tax burden is the only thing we have to hang our hat on when our leadership is more concerned with poaching business from other states than investing in education and infrastructure to foster local, organic growth.

  2. Attracting businesses has little to do with recovery from a recession, just saying...

  3. Interesting suggestions, corbinj! And funny that the brilliant minds behind the study didn't incorporate any of those potential investments in figuring our economic competitiveness.

  4. Let's poach as much business as we can from other states. Then, with the jobs they bring and the expanded tax base they provide, let's improve our education system and infrastructure. And let's keep our state bright crimson on that map of personal and economic freedom.

  5. For those who have trouble finding the map I mentioned, it appears on this Web page. I'd call it one heck of a scientific ideological argument.

  6. [Anon: nope: still video spam, still off topic. I'm not censoring it: you can't censor YouTube! Feel free to start your own blog to start new topics of conversation. That's what I did. The topic on this post is the economic competitiveness study and the ideology of ALEC and Laffer.]

  7. Thanks Cory. I knew it would be hard for you to accept another point of view. Don't worry, I don't think too many of your readers saw it.


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