A few days ago 24/7 wall st. released a summary of their conclusion for ranking states. It seems that we don’t often care what the criteria is for the ranking. We mostly get excited that there is a ranking. And then we have something to talk about, to compare ourselves with. Who is this 24/7 anyways?
I forwarded their release, that had been forwarded to me, to a friend of mine who lives in Jackson Hole. Jonathan Schechter has been living in Jackson for over 20 years. He is a man of many talents: analyst, economist, statistician, environmentalist, journalist. He founded 1% for the Tetons (check in out: onepercentforthetetons.org) He also writes a weekly column for the JACKSON HOLE NEWS AND GUIDE…He spends a lot of time thinking about our world, our place, how we inhabit the earth. I simply asked him if he had seen the rankings. His simple reply was no, but then he followed with this:
“The thing to focus on is that this rating system basically equates healthy state finances with being well run. WY produces a lot of hydrocarbons and, fortunately for us, our mechanism for funding state government is based on taxing hydrocarbons. Hence we’re in good shape financially. However, that’s not the same as being well-run.
In contrast, CA is a mess, in part because the politics are a disaster, but also in part because it relies on taxing goods but not services. In the last 50 years, the economic mix has done a massive shift from goods to services, but the state’s financing system hasn’t kept pace. So now they’re trying to run a much bigger government based on something like 25% of the state’s economic activity, whereas 50 years ago the figure was north of 50%.
The point is that, in this study, WY is being rewarded for not having left the 1960s, while CA is being punished for existing in the 21st century with a 20th century financing mechanism.”
Thanks, Jonathan, for providing clarity to the rankings.