For years progressives in blue states have had to put up with listening to conservatives in red states bray about their supposed economic “miracles” of low-tax, low-investment paradises of low unemployment in places like Texas and North Dakota.
The fact that these economies were creating mostly minimum-wage jobs with terrible safety nets and awful infrastructure fell on deaf ears. So did the response that those jobs were temporary and fossil-fuel based, and would not last. Undiversified economies based on a single natural resource tend to fare poorly over time.
And indeed it looks like progressives are getting the last laugh due to low oil prices:
States dependent on oil and gas revenue are bracing for layoffs, slashing agency budgets and growing increasingly anxious about the ripple effect that falling oil prices may have on their local economies. The concerns are cutting across traditional oil states like Texas, Louisiana, Oklahoma and Alaska as well as those like North Dakota that are benefiting from the nation’s latest energy boom.
“The crunch is coming,” said Gunnar Knapp, a professor of economics and the director of the Institute of Social and Economic Research at the University of Alaska Anchorage.
Michael Hiltzik at the L.A. Times had more on the topic earlier this week:
A greater danger to the state’s boom-era reputation is that the receding tide may expose a lot of economic wreckage to public view. One consequence of the state’s low-tax, low-service credo is that infrastructure spending has been starved, just at the moment when it’s most needed. As the Texas Tribune reported last year, local roads have become so damaged by heavy oil-patch traffic that in some districts the only option has been to convert paved roads to gravel — there’s no money for repaving, despite the state’s burgeoning wealth.
That shows how little pressure has been placed on the oil industry to carry its fair share of the public cost of the boom or contribute adequately to public investment. When the boom becomes a bust, there will be even less money, and you can bet that the oil industry will be pleading poverty.
When it isn’t simply padding the bottom lines of the wealthiest Americans, most conservative economic policy tends to be about taking the easiest, most aggressive and short-sighted approach to any problem. Eliminating taxes so you can entice corporate grifters may net some immediate transitory gains, but it’s destructive in the long run. Similarly, putting your eggs into the fossil fuel basket doesn’t just destroy your local environment and add to the climate change already ravaging your state, it also puts you at severe risk of economic seizures if fossil fuel prices decline.
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