The Black Hills Knowledge Network provides GDP data showing that South Dakota’s economy under Governor Dennis Daugaard has not performed as well as the national economy under President Barack Obama:
The Daugaard Administration began with a remarkable 5% GDP growth in 2011. But as the Governor’s 10% cuts in the FY2012 state budget set in, so did a recession, with South Dakota’s real-dollar GDP shrinking 0.9% in 2012. South Dakota’s GDP won back that 0.9% in 2013, then crawled up another 0.6% in 2014.
Over the same period, the national GDP has been recovering at between 1.4% and 2.2% a year.
Nearly all of South Dakota’s economic growth under Daugaard happened in 2011. Net GDP growth since 2010 is 5.6% for South Dakota and 7.8% for the U.S.
One could argue that the comparison is unfair because Governor Daugaard is competing against really strong growth preceding his administration, while President Obama is posting growth over the declining numbers with which the Bush Administration and the housing bubble saddled him in 2008 and 2009. But one could also argue that Governor Daugaard has had a harder time keeping up with previous growth rates than President Obama has. Under the Daugaard Administration, South Dakota’s GDP has averaged 1.4% growth each year. At the same time, national GDP growth has averaged 1.9% each year. Pre-Daugaard, from 1997 through 2010, our state GDP growth averaged 4.0% a year.
If we get creative and don’t give administrations credit for their first years, when they are operating in part under the budgets of their predecessors, Governor Daugaard’s average annual GDP growth is 0.2%, while President Obama’s is 2.0%. Governor Daugaard is 3.8 percentage points below the late-Janklow/Rounds-era GDP performance, while President Obama is just 0.2 percentage points behind the pace set by the late-Clinton/Bush2-era.
While America recovers under President Obama, South Dakota sputters under Governor Daugaard.
Daugaard has had a compliant congress to work with. Obie has been saddled with domestic terrorists in congress for most of both terms.
Interesting—that would suggest the entire SDGOP, executive and legislative, owns this economic slump. What’s going wrong here, Republicans?
Republicans cannot govern, simple as that. When you rely on the federal taxpayers to balance your books, you cannot help but sputter. South Dakota needs a new revenue source and we need it badly. Hide and watch is no way to run a business nor is that any way to run government.
I’m not blaming Gov. Daugaard for our sluggish ways because the seeds (or lack thereof) have been planted a long time … but the scary thing here is that our economy is barely slugging along even though the farm economy has been booming. We have to diversify and modernize, and we’ll only accomplish that through a) amazing schools, and b) outstanding quality of life in our towns and cities. Young people … especially young entrepreneurs, who are as much in demand in rural communities as good quarterbacks in the NFL … have wings today and can live and work anywhere so we need to be the place they want to live. And pheasant hunting may not be quite enough anymore.
Bernie is right.
All we have is grain meat, money to loan and our smart kids for export.
South Dakota government locks up all of the taxpayers’ excess money in trust funds which are invested on Wall Street instead of Main Street. Government is essentially betting that taxpayers will get a better return on investment somewhere other than South Dakota. How’s that for a message? “We’ll take the money that belongs to you, taxpayer, and ship it out of state.”
Individuals should responsibly set aside money for their retirements, but government isn’t going to retire and isn’t going to lose the ability to raise taxes to pay expenses as they are incurred. So this locking up of over a billion $$ in trust funds with parsimonious annual withdrawals for the intended purposes of the funds is causing our state economy to contract. If government were to open the spill gates a bit more and allow more money to flow into education, healthcare and other worthwhile needs that money would circulate in the SD economy and create the growth that Republican government is currently denying South Dakota.
Although the national unemployment rate in 2011 was 8.9. SD was only 4.7. In 2015 national rate 5.3 and SD 3.8, so nationally it was a much easier expansion as those people returned to employment.
In 2015 Rapid City is at 3.7 and Sioux Falls 2.9, so we’re at what’s considered full employment levels. Bearing in mind we compete against more attractive states with higher wages and better jobs we’re not likely to ever get we have pretty good numbers.
A more subjective way is to just look around. Sioux Falls is growing like crazy. Beautiful houses coming up like never before, both in SF and even Madison. I’ve never seen such a high standard of living. When I was a kid my parents joked about the junkers around campus. Now the lots are filled with pretty new cars. Madison is blossoming, real estate values have climbed considerably.
I’m mean give the devil his due Cory. It’s ok to say something nice about the Repubs. If you say something nice, they’ll say something nice.
The problem with focusing on Sioux Falls and Rapid City is because they are growing like crazy because people are moving there from rural SD because they perceive there are no opportunities in the rural areas whether it be educationally, recreationally, or professionally. While Sioux Falls and Rapid City may be very healthy right now because of this, it is a poor barometer of where South Dakota is at.
People want their needs met. They want an enriching environment to live in, things to do, and upward potential. Like many, I want my hometown to continue to thrive, but it is almost inconceivable for me to move back there due to this lack of enrichment.
Movement to the cities has been constant everywhere. This is the urban divide in the next post, but the question is what town are you talking about? Some of the small ones are just gonna fade away. Younger people want things to do. Older people need access to services. Expectations have changed drastically.
Bernie, thanks for that reminder about the farm boom! In 2013, when corn prices were booming, our GDP growth still didn’t crack 1%. What did we lose during that time that corn prices barely made up for?
I dread the thought Bernie suggests, that maybe the slowdown is our failure to invest in education coming home to roost. If that’s the case, no immediate policy will rectify the situation. Even if we act now on whatever good ideas come out of the Blue Ribbon K-12 Panel, it may take a generation for the impacts to trickle back through and revitalize our economy.
Thinking about what HC and MD say about urban growth at the expense of rural areas… Suppose we have data that shows most of that urban growth in South Dakota really does come from South Dakota small-town folks moving to our bigger towns (and I think we have data to that effect). Can we still post a net gain by those folks being able to live in more efficient urban settings, land better paying jobs, and buy more stuff from the big-town stores? I know rural flight plays heck on Webster, Groton, Clark, and Redfield, but if SF and RC grow and the state as a whole posts higher GDP, are we better off as a state?
HC, I’ll acknowledge the jobs data that shows we didn’t have as much slack in labor to drive bigger growth. Perfectly reasonable, just like the point that Obama had a deeper GDP hole out of which to climb. But does Bernie’s point about the long-term trend still stand? We had full employment, far better jobs numbers than the national average, during the Janklow and Rounds administrations as well, but that didn’t stop us from posting 5, 6, 7, heck, even 10.8% GDP growth (2002 was the peak). Unemployment actually rose from 2.4% in Jan 2000 to 3.3% in Dec 2002. So a tight labor market doesn’t explain the Daugaard economy’s underperformance relative to past state GDP growth.
Yeah, but SD has a balanced budget! Rounds’ and Gov. D”s bragging points.
(sarcasm intended)
Low unemployment in South Dakota! That is a ruse, intended only to generate splashy headlines and completely ignore an appalling issue. This State purposefully ignores unemployment on all of our 9 Sioux reservations, saying through policy fiat that unemployed working-age adults on all 9 reservations are universally considered to be “not actively looking for a job” (and therefore are not figured into the employment rate calculations). That’s just wrong and bald-faced lying to boot, but what’s even worse is the terrible attention that this State has paid to its Tribes and tribal citizens over the past decades, very happy to let the Federal government have all the responsibility for the myriad “problems”.
When are we going to awaken to the fact that when tribal boats are lifted in this State, ALL boats will be lifted! It has been estimated that the varied Tribes and tribal activities alone add roughly $400 million annually to the local Rapid City/Black Hills economy. What’s the tally across all 9 Tribes in our State, I wonder? Our State economist should generate such an estimate for our consideration.
But there is an accepted new normal. Stock market returns for example are just going to be lower. The big retirement funds, and I’m specifically thinking of Vanguards was set up to pay 5% a year. They can’t perform to that extent and had to lower their payment to more like 3 or 3.5, I can’t remember exactly, but it was considerable.
Economy wise, the state is doing good. You can’t expect big gains when we have full employment when no one wants to move here. We’ve talked about this for years. It’s the nature of our state that you don’t like and is not likely to change.
My Uncle Clayton, I think you mowed his lawn too so maybe he also gave you talks, would say there’s no imagination in this state. Get out! was his advice. Talent is gonna go where they feel challenged, want to live, etc. Maybe South Dakota is doing just fine for those people whose values match what goes on here, and it’s come a long way. You want to pull it somewhere it’s not ready to go. Maybe you should ask yourself why you want to do that. Your talents could take you anywhere. Heidelberger Post was my suggestion but nobody ever listens. Adrianna would have been pissed, but she would have gotten over it.
Sorry to misspeak in that regard, Jeff! I try to pay more attention to the undercount of tribal underemployment (see articles from September 8, September 18, and here, here, and November 20, 2014), but it is easy to slip into debating South Dakota economics on the basis of the official numbers. My bad for forgetting.
We should most certainly work to lift all boats. Full employment on the reservations could be a key component of lifting our economic growth numbers out fo the Daugaard doldrums.
But tribal employment is a chronic problem, likely no better during the Rounds and Janklow days, yet Rounds and Janklow were still able to post those big GDP gains even without helping Indian country. Is it possible some dynamic between the economies on reservation and off has changed during the Daugaard administration and exerted more drag on our state economy?
Uncle Clayton, on Prairie and 5th? Fine house and yard!
But no imagination in this state? Dang, I wonder what he would have thought if I’d been blogging back during those mowing days.
I want to pull South Dakota somewhere that it’s not ready to go? Well, then South Dakota needs to be convinced to go there!
@Mr. Hunhoff … I’d add a “c” to your schools and life quality. It’s a viable safety net for low income and unemployed. Few companies will move their business into the state because should they need a temporary layoff, their workers wouldn’t be able to subsist for even a short time. The workers would scram to a sympathetic state and the business would be left with no workforce when business picked up.
Spearditch is growing so fast nobody under the age of forty can afford a place to live: how is that good?
There was a very good Star Trek episode where the ship met a quasi life ship (that once contained life forms but now extinct). A human from the federation wanted to join that ship and explore all the galaxies. The quasi life form tried to share a vast array of experience with the human too quickly, so much so he had to say slow down, slow down, we only absorb and change so fast. We must probably all have our confinements. Clint Eastwood would say “A man has got to know his limitations.” There’s a line somewhere, but for most South Dakotans a smaller circle of experience/knowledge/etc. A lot of people take comfort, and probably too much, in what we think we understand.
Bernie is right. We need to be the place people want to move to, the place people want to raise their families, something like Mayberry, RFD. We need great schools, and good companies to move employment here.
None of this is going to happen, until the government does what it needs to do.
Our infrastructure is in shambles.
Many of our WPA bridges are reaching end of life and DOT has gone in to maintenance mode.
Railroads are barely operating in the state
Our power grid is totally inadequate
Telecommunications in some rural towns is still on electromagnetic relays.
We don’t have the water or sewer infrastructure we need to attract businesses.
Our State, county and city governments need to work together to get this all done. We need to stop blaming the other guy and just get it done.
Mr. Clark, you won’t get elected as an earth hater with those Democratic ideals: DD isn’t going to appoint you, is he?
Or wait: DD might want to look like an enlightened despot and appoint a squish like Mike Clark who would then cave to the unwashed masses in the earth hater legislature.
My bad.
he he he
The fact you call me an earth hater might be just push I need to get appointed.
Why are you lobbying a Democratic crowd when you should be at Pat’s place sucking up to the Baron Harkonnen?
On Hillary Clinton:
“MC
September 3, 2015 at 2:03 pm
I’m going to beat the rush and start hating her now.”
Mr. Clark: you are the perfect appointee to DD’s death panel.
Good play, sir.
Mike Clark is post-partisan like Ted Klaudt is free.
Larry, an individual can hate Hillary Clinton and still condemn South Dakota’s infrastructure as inadequate. However, given the Governor’s willingness to put partisanship over practicality on Medicaid and the ACA, it would seem likely that irrational partisan statements will carry more weight in appointment than sound policy views.
(I don’t hate Hillary Clinton, but I’d rather have Bernie Sanders as my President, MC in Steve Hickey’s seat so we have a blogospherian in the Legislature, and a stern critique of Daugaardonomics that will help us elect Stephanie Herseth Sandlin as our next Governor.)
The economy in South Dakota is on shaky ground. The national unemployment has now dropped to where it was in 2008 at about 5.1%, not counting Natives and long time unemployed. The states unemployment is a vacuum as the Native population is not counted in the mix. All things considered, South Dakota is like Greece, dependent on the central government or bank to shore it up.
jerry,imagine how much worse Dakota’s economy would be if wingnuts win the WH and keep both houses of congress. Remember how swell things were under dumbass dubya and wingnuts?
Larry, I will engage Republicans, Democrats, independents, whoever else. My goal is to keep government in its place and take care of what needs to be taken care of.
Right, Clark. Ball: meet bat.