Wednesday, November 9th, 2011

Live State Policy Difference Experiment in Progress

About a year ago I wrote a post called “Does Policy Matter?” examining whether or not state policy really makes that much difference in how various regional economies perform. It seems pretty obvious that states can really screw things up, but can they make it better?

With the voters repealing legislation that would have put limits on public sector unions in Ohio, we now have a situation where five core Great Lakes states, states which face broadly similar challenges and opportunities, have now staked out some very interesting contrasts in how they want to do business. It will be interesting to see how they fare. The contestants, with their strategies, are:

1. Indiana. We’ll be the South-lite. Think K-Mart, not Wal-Mart. Bare bones and proud of it, though unlike Texas and Tennessee we don’t have right to work but we do have a state income tax.

2. Illinois. We’re as screwed up as California and New York, but we think we’re just as rich and important as California and New York, so we don’t really care.

3. Wisconsin. Why don’t we see what happens when you take a chain saw to a blue state?

4. Michigan. We’ve got the worst business reputation in the country and have been in recession for over a decade. But let’s not go too crazy changing.

5. Ohio. Union and proud of it. Big blue all the way baby, and let’s super-size those pensions while were at it.

May the best state win.

Topics: Economic Development, Public Policy, Strategic Planning

52 Responses to “Live State Policy Difference Experiment in Progress”

  1. TMLutas says:

    I would not be so sure about gasoline prices being unable to drop below $3. The ceiling price of gas is dropping as FT technology continues to progress and we’re gaining new supplies of hydrocarbon fuel stocks for the process with the fracking revolution. Turning NG into transport fuel is going to be more appealing politically and we’re going to be seeing more and more pressure to erect FT plants to convert solid and gas hydrocarbons to liquid transport fuels. That’s going to push fuel prices downward.

  2. Chris Barnett says:

    I think NG will displace coal for thermoelectric generation well before it displaces gasoline as a motor fuel, mainly for federal regulatory compliance (clean air regs) reasons.

    This has already started: Citizens Energy will convert its coal boilers (at a steam-electric cogeneration plant in downtown Indy) to NG, rather than continue to pour money into better and better coal-scrubber technology.

    Multiply this by the several hundred coal-fired electric units in the Midwest, and pretty soon all that extra natural gas will be burned up making electricity.

    Again, the Hoosier practical (or cheap) streak: The cost of compliance for burning coal (which Indiana has in abundance) will outstrip the cost of conversion. It’s not because we have any aversion to burning coal…we have an aversion to spending too much money burning coal.

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