Two mysterious kingdoms generally thought of as allies are facing tough times in these days of cheap gas prices.
One's in the Middle East, where Saudi Arabia is planning to raise prices on essentials like water and electricity in the face of a $98 billion budget shortfall.
The other's in the northern plains. On Monday, North Dakota Gov. Jack Dalrymple ordered all of the state's agencies to cut spending by 4 percent, citing a $1 billion hole in the current state budget. Even that slashing gets them only halfway, so North Dakota's also tapping about $500 million from a "rainy-day fund" of reserves.
Old people might not have it so good: Nursing homes and long-term care sites are worried that a drop in human services spending might give them the short end of the stick, especially in rural areas, where budgets are already tenuous. Consider the women in this Grand Forks Herald photo from yesterday: Would you want to be the one to tell them their facility's on the chopping block?
A recent report from the Federal Reserve Bank of Philadelphia found that while almost all American states saw economic growth in the last three months of 2015, seven actually contracted. The two with the worst economic index readings, a measure that includes unemployment, salary disbursement, and manufacturing hours worked, were Wyoming and our western neighbor. Both territories rely disproportionately on oil revenues to make their economies go.
Oil prices have been on the decline for more than a year and a half, and the $28-a-barrel figure is about 70 percent less than the mark hit in summer 2014.
Now's no time to gloat. While cheap gas is good news for Minnesota's economy, we should be sympathetic to North Dakota. They didn't ask for this. They just took advantage of what they found, and now they're in a bind.
But this is a good time to review just how many and frequent were the calls from Minnesota politicians, nearly all of them Republicans, who looked at North Dakota as a model state, with policies Minnesota ought to follow if it wants to find its way to economic prosperity. Such state-to-state comparisons can be traced back at least to 2011, when new Gov. Mark Dayton announced plans to raise taxes on Minnesota's richest earners.
Don't go doing that, Republicans warned. We'll lose all our business to North Dakota. Then-House Speaker Kurt Zellers, a Republican from Maple Grove, said Minnesota should look for the same business-friendly — meaning, low-tax and less regulation — policies seen in the Dakotas.
Rep. Dan Fabian, R-Roseau, whose district borders North Dakota, said businesses and jobs were already moving westward, though he acknowledged we "may not be able to quantify the numbers." Right.
In 2012, Kurt Bills, a Republican legislator and then-U.S. Senate candidate, had one campaign line that he recycled frequently. "There are two areas that are booming right now in the United States," Bills told MinnPost. "Washington D.C. and North Dakota. And isn’t [it] interesting that Washington D.C.’s booming because of borrowed and printed money and North Dakota’s booming because of real economic growth."
That rhetoric didn't exactly catch on with Minnesotans: Bills lost to DFL U.S. Sen. Amy Klobuchar by 35 percent.
But the next year, Republicans were at it again. When Dayton and his newly won DFL majorities enacted big tax increases on the rich, as he'd wanted all along, conservatives expressed fear that all our jobs were about to move to the Peace Garden State.
"North Dakota already is putting up billboards in our state, encouraging businesses to hop the border to take advantage of a better business climate," wrote Rep. Linda Runbeck, R-Cirlce Pines, in a letter to constituents in May of 2013.
"Just to our west," wrote Rep. Bud Nornes, R-Fergus Falls, "North Dakota is renting space on Minnesota billboards, touting itself as 'open for business' in attempt to lure our companies across the river."
And here's Rep. Tom Hackbarth, R-Cedar, in a letter to the folks he represents. "North Dakota is already is putting up billboards in our state, encouraging businesses to hop the border to take advantage of a better business climate."
Come to think of it, those might say as much about the laziness of politicians writing letters to their constituents as it does bad ideas about tax rates. But the line of argument didn't go away. In a 2014 appearance on TPT Almanac, Republican candidate for governor Jeff Johnson was asked if he really thought Minnesota should look to Wisconsin, and Gov. Scott Walker, for business-friendly economic policies. He did, but that wasn't the only place a Johnson administration would seek inspiration.
"I’ll also look west.," Johnson said. "I’ll go all Jack Dalrymple on Minnesota, because North Dakota’s doing really well. Because I think they understand that government getting out of the way of things as much as possible is actually a positive thing for the economy.”
These days, "going all Jack Dalrymple" on the Minnesota economy means writing a letter to every state agency, begging them to come up with a combined $500 million so your state doesn't fall into debt.
If only we'd listened, and slashed the taxes, and cut regulations, maybe Minnesota wouldn't be in the economic position it's in now: A 3.5 percent unemployment rate and a $1 billion surplus.
Maybe then we'd finally get around to sound, long-term economic development... by getting out our shovels, heading into our backyards, and hoping one of us strikes it rich.