Wyoming is still in a recession, and there is little evidence to say there will be a turnaround in any near future.
Further, there is a concern for a double dip, and Wyoming is particularly susceptible. To date, the majority of the state government of Wyoming’s policy “remedies” are more harmful than helpful.
To understand the causes and consequences of a new recession, the series of booms and busts of the business cycle must be understood. In this case, the Wyoming government’s investment spending is the primary factor in determining the future success (or lack thereof) of the economy. Using Austrian economic modeling, we can analyze the impact of Wyoming’s government interference in the economy.
Wyoming’s GDP is still hovering around recessionary levels from 2008. If and when the United States economy enters another downturn, how much further can Wyoming fall? Wyoming is among the worst states in the country in job growth since 2009. This could be due to Wyoming’s reliance on the energy sector as the prime private employer in the state.
Nationally, the energy sector has been uneasy, at best, since 2009. This is the primary argument among Wyoming politicos who seek to “diversify the economy.” Unfortunately, this has been used as an excuse to expand Wyoming’s corporate welfare state to coax new industries to make their home in Wyoming.
ENDOW’s 20-year diversification report covers a wide range of topics, from agriculture to engineering to taxation and education. The commission sets high goals early in the report, basically promising economic prosperity within 20 years.
Their goals are unrealistic for a few reasons; namely, they do not account for any changes in the national fiscal or monetary policy, which would have a direct impact on whether or not they achieve these numbers. They expect an 82 percent GDP growth during that time frame — 22 percent of which they directly attribute to their actions.
Even more curiously, an excerpt of the report reads: “We want to remove the perception that government will be responsible for achieving the plans’ objectives.” That statement seems odd in the context of the millions of public dollars the plan requests.
“ENDOW will only result in unsuccessful cronyist spending” – Austin Hein
“Through ENDOW, the taxpayers will be at a loss.” - Austin Hein
Government spending is not a substitute for real savings and investment in the private sector. When there is real, market-driven, savings, and investment, the economy flourishes. Savings and investment spending leads to long-run consumption increases.
This is how Wyoming needs to recover. Look to long-run market solutions, not government short-cuts. When government plans for the economy, the stakes are high. Wyoming needs savings and investment plans by the many, through private firms, not by the few.
The full paper can be found at https://wyliberty.org/the-austrian-business-cycle-and-the-wyoming-economy.