A Letter from ‘North Korea’
03/28/2012 1:10 pm EST
By most economic measures, heavily regulated, mostly Democratic Massachusetts has outperformed the national economy in recent years. Not that you’d know it from business-channel rhetoric, writes MoneyShow.com senior editor Igor Greenwald.
I’m writing to reassure you that I remain alive and well and will not require helicopter drops of food, medicines, or other necessities. This despite the fact that I live in Massachusetts, a state recently described by Ann Coulter as “North Korea with more Irish people.”
Coulter was actually defending one of our more famous sometime-residents, former governor and current Republican frontrunner for the Presidency, Mitt Romney. Romney performed a minor miracle during his time in office by convincing us reprobates to live within our modest means, Coulter suggested.
Others on the right haven’t been as kind. Romney’s rivals for the Republican nomination, notably Rick Santorum, have taken advantage of the publicity generated by the Supreme Court arguments on the constitutionality of the 2010 health reform law to pound away at its similarity to the Bay State’s “Romneycare” universal coverage mandate.
And indeed, we’re limping badly here under the burden of universal health care access. At 6.9%, our unemployment rate is 1.4 percentage points below the national average. The state’s rainy-day fund has $1.4 billion after a topping off last fall, and Standard & Poor’s hasn’t upgraded Massachusetts’ rating since October, when it put us on par with oil-rich Alaska. Our education levels and average incomes are among the highest in the nation, while the poverty rate is one of the lowest.
According to this handy economic survey, issued at year-end by JPMorgan Chase economist James Glassman, Massachusetts saw a 2.6% increase in real GDP last year, versus 1.9% for the US as a whole. Glassman forecast 3.6% real growth this year for Massachusetts, and 3.1% for the US. Employment has also grown faster here than nationwide.
This isn’t the dead hand of a statist bureaucracy swelling, either. Over the last year, Massachusetts lost 4,000 government jobs, almost entirely at the local level. But overall non-farm employment rose by 27,000, boosted by gains in professional and business services, hospitality, and retail.
Every time I drive to my parents’ house in a Boston suburb, a new Genzyme (GENZ) office building seems to have sprouted overnight in a nearby industrial park. The same town hosts the corporate headquarters of the thriving TJX Cos. (TJX) chain and the less-hale Staples (SPLS).
One of the state’s largest employers, EMC (EMC) is also nearby. Its stock is up 38% year-to-date. The state’s three largest employers are its top two teaching hospitals and Harvard University; they’re not hurting either.
I bring all of this up because over the last two days, Florida Governor Rick Scott, Texas Governor Rick Perry, and former General Electric (GE) CEO Jack Welch have been renting out CNBC for their standard critiques of heavy-handed government policy. As I understand it, we should let all comers drill for oil and natural gas in our backyards and basements while we go for a long drive, budgeting $2 a gallon for gasoline.
Only slightly less facetiously, their message is that government needs to get out of the way to enjoy the sort of economic growth seen in Texas. Odd, then, that Massachusetts outperformed Texas on the jobs front between 2008 and 2010, and that’s before considering that a much higher proportion of the Texas jobs pays minimum wage.
CNBC’s own much-ballyhooed business climate rankings, derived from no fewer than “43 measures of competitiveness developed with input from business groups” place Massachusetts sixth among the 50 states; Texas ranks second.
But while Texas topped the charts in “infrastructure and transportation,” it came in 32nd in “quality of life.” Massachusetts placed tenth on that metric. In education, it was fourth, 23 spots ahead of Texas.
So Texas sounds like a great state for corporations, but people seem to do better here in Massachusetts, overall, by a variety of measures. And since corporations now get to vote with their pocketbooks, one guess as to which economic model will dominate the airwaves.