Sunday, November 30, 2014

I Don't Like That We Need Payday Lenders, But We Have To Face Reality, And Reality Bites.


     Are payday lenders really the loan sharks they're often made out to be?  No doubt some are, but my sense of the industry as a whole is that it exists, like every other private sector entity I've ever heard of, because there's an economic need for it. Now that it looks like South Dakotans are likely to take the issue head-on at the ballot box in 2016 the status quo is likely to come under some severe attack. I get that part, but for me the post-status quo is much more worthy of consideration.
     First off, I have neither a direct nor indirect interest in this industry, which I abhor but accept as a necessary adjunct to all the conventional methods of financing that we're all familiar with.  Fact is, there are lots of folks in our communities that simply have no options for getting relatively small sums of cash to tide them over as necessary, either from time to time or chronically. I understand that the way their fees and charges are structured, the true interest rate on many of their loans can run to several hundred percent when annualized. The industry of course claims that the default rate on these loans is so high that the business requires these astoundingly high returns in order to make up for loan losses.
     I've seen studies that both support and reject this claim, so I won't go there for now.  My biggest concern with the proposed ballot issue is that by capping the interest rate these lenders can charge at 36%, the industry will virtually disappear. Indeed, one of the promoters of the initiative, GOP state rep Steve Hickey of Sioux Falls, implies as much when he says, "[The industry] had their chance to work with us and stay in business in South Dakota," referencing some proposed regulations that were discussed at this year's legislative session, ultimately rejected by the lenders.  Now Hickey seems intent on a ballot measure that, by capping interest rates at 36%, won't let them "stay in business."
     No doubt a lot of people are cheering this one on.  But are they considering the outcomes?   A 2011 study on the effects of regulating the payday lending industry by the University of Washington concludes that "Household financial security does not necessarily improve after payday lending is prohibited through rate and fee ceilings of less than 36%" and that "without access to payday loans, consumers likely use overdrafts, pawnshop loans, and late bill payment to cover short run credit needs."  In other words, the absence of payday lenders causes consumers to jump out of one frying pan and into another fire.  Happily, I haven't been subjected to bank overdraft fees in many a long year, but I think mine charges $39 per check.  You can annualize that for yourself, but if the bounced check is on a typical household bill of a few hundred bucks or less, I'd say conventional bankers will see a windfall if Hickey's initiative passes.  Same goes for pawnshops and entities like credit cards that stick consumers with late fees.
     Meantime we have to consider social costs associated with the absence of payday lenders for those who are desperate for cash.  Will crime increase? What about money-focused problems at home setting off family disruptions and abuse?  Will people go without food, medication, even shelter?
     Some support for this concern comes from a 2008 study from the Federal Reserve Bank Of New York.  In its study titled "Payday Holiday:  How Households Fare After Payday Credit Bans" the New York Fed concluded:  "Payday loans are widely condemned as a “predatory debt trap.” We test that claim by researching how households in Georgia and North Carolina have fared since those states banned payday loans in May 2004 and December 2005. Compared with households in states where payday lending is permitted, households in Georgia have bounced more checks, complained more to the Federal Trade Commission about lenders and debt collectors, and filed for Chapter 7 bankruptcy protection at a higher rate. North Carolina households have fared about the same. This negative correlation—reduced payday credit supply, increased credit problems—contradicts the debt trap critique of payday lending, but is consistent with the hypothesis that payday credit is preferable to substitutes such as the bounced-check “protection” sold by credit unions and banks or loans from pawnshops."
     Get that? "Payday credit is preferable to substitutes."  It's true that the South Dakota initiative wouldn't "ban" payday lending, but as Hickey himself understands (and as that UW study concludes), it would be a de facto end to the industry in this state, where it couldn't survive with a 36% rate cap. Much as I admire Representative Hickey's good faith effort at trying to protect some of our most financially vulnerable citizens, the consequences of his proposal may be more than the financially afflicted among us can bear. 

Addendum.  Commenter Tim provided this url about the USPS functioning as a lender, considering it an alternative to the present payday lending schema.  Well worth reading. 

Addendum #2.  A study provided by Bill Fleming conducted by Pew Research is more sanguine about the aftereffects of payday loan regulation than the two I posted. 

Saturday, November 29, 2014

Rapid City, Do We Just Sloganize About Doing Big Things Or Can We Really "Do Big Things?" Dennis Halterman Has An Amazing Vision:

I'm moving an exchange between Dennis Halterman and Cory Heidelberger up here where I can give Dennis' thinking a headline:
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Dennis HaltermanNovember 28, 2014 at 7:34 AM
"We simply don’t capitalize on this. What do you think this city would look like for our children and grandchildren if we bonded $180 million in tax dollars over the next 30 years to help create and maintain a relevant, high tech, economic base?"

"Dennis, what can the city do with $180M in bonds to create more engineering jobs?"

"We do it by switching the paradigm of how we see money move in our local economy. We start with the realization that we can get jobs for low skilled, low paid workers, but what we really want is high skilled, high paid workers.

The true profit engine of our economy today is knowledge. Companies are not hiring Mines graduates because of what they can make, they are hiring them because of what they know. The intellectual propriety of the patents they create and help create is where the real value is, particularly in, but not limited to, IT. This isn’t generally obvious because the value of intellectual property doesn’t show up on Profit and Loss statements and so sometimes we will see a company pay billions of dollars for another (typically a start-up) that has never made a profit. The purchaser is buying patents the not profitable company has developed and owns.

So, instead of spending money to build a new civic center, which is just a building that designed to create profits in Rapid City, we take that money and use it to specifically design and create a corridor designed around the School of Mines, it’s knowledge, and it’s product: young people with engineering degrees who have that knowledge. There is very little actual need to ship them to other places as they will never actually build something, they will use their knowledge of highly advanced and technical engineering to design things that will be build at remote locations (often China). They will sit in offices. We can build offices here.

A place to start would be a building that is absolutely state of the art in things such as teleconferencing. At the same time we contact the companies that typically hire the graduates, tell them our plan, and provide an economic incentive for them to satellite operations here, for instance a lower starting salary, which we make up to the graduates by refinancing their student loans at a decent interest rate (say 1%), or simply paying some of them off as they stay here (which many, many want to). Everyone starts to win.

With the Civic Center we are talking about spending $300 million dollars over the next 30 years. That is an enormous amount of money we could use in outside of the box thinking that could actually elevate our local economy dramatically in a few short years (imagine Rapid City filled with Twenty-Somethings earning an average starting salary of about $50,000)."

Friday, November 28, 2014

What??!! Only 26% Of "Mines" Grads Find Work In South Dakota? Something's Amiss Here.

      That South Dakota School Of Mines And Technology (known locally as "Mines") 
is one of the country's leading engineering, science and technology schools is well known.  Its graduates enjoy a 98% job placement rate, with average starting salaries for its Bachelor's degrees holders at a handsome $62k/year.  Not bad these days, not bad at all.  Only problem with all this, at least from the perspective of a South Dakotan whose taxes go to support the school, is that just 26% of its grads find work here
First-year South Dakota placement rates, by campus, 2012. Source: South Dakota Board of Regents, "Placement Outcomes of Regental Students," Nov. 2014, p. 9.
 in South Dakota, which seems quite odd on a couple of fronts, actually.
     First off, there's the matter of the school's mission.  From its website, Mines acknowledges that it is a national-class school, noting that "the nation needs more well-prepared engineers and scientists to help meet the challenges of the twenty-first century."  All South Dakotans should take some pride in the fact that we have a school of this caliber in the state, one that trains its students to take their places in work settings around the United States--and no doubt in many other parts of the world.
     This is fantastic, but what I find troubling about it is that the school essentially is committed to serving as an academic conduit through which students, by a 3-to-1 margin, are being trained here, then exported out of the state.  For this I don't fault Mines, but I do wonder why our state's political and business leaders don't see an inherent problem.  Are South Dakotans getting a fair return on the investments that we make in the intellectual capital created by the school and then sent abroad in such sizable quantities?  These numbers make me wonder if the discussions about privatizing Mines a few years ago didn't have some merit, after all.  I think the notion could use some reconsideration.
     More challenging, particularly to our elected officials, is the problem of why South Dakota doesn't have an economic environment that can capture more Mines graduates and entice them to stay here.  From the table above you can see that our state's universities, except for Mines, have reasonably high in-state placement rates.  Why not Mines?  And why is Governor Dennis Daugaard pitching studies in engineering and technical fields when the one school that specializes in that area of training loses 75% of its graduates to other states?  A couple of months ago, Governor Daugaard  spoke at Girls State and told those promising young women, no doubt the cream of their generation's crop, that they should get a degree in one of the technical fields: "In South Dakota particularly," he said, "the demands that we're seeing are in the sciences, engineering, information technology, accounting, the health fields and in the skilled trades." Looking at it from the perspective of a recent Mines graduate, I'd say this is a load.
     I understand that Daugaard is stressing these studies in order to be consistent with his year-long commitment to addressing South Dakota's chronic workforce shortage.  That we're short of people with technical skills is a given.  That our top technical school grads have trouble finding jobs in those fields is a fact.  Is it that the jobs aren't actually there in the quantities that Daugaard thinks they are?  Or is it just that South Dakota's lousy wage structure can't attract top people in these fields to stay here?  There's a reason for the deplorable in-state placement numbers from the School of Mines.  I just wish somebody in our state's leadership would address it, up front.

Wednesday, November 26, 2014

So Which Is It? Do We Hate The EPA Or Do We Love The EPA?

      When it comes to "love-hate" relationships, there isn't a much more intense ambivalence than the one South Dakota Republicans seem to have with the Environmental Protection Agency.  Hardly a day goes by that our GOP Congressional reps Senator John Thune and Congresswoman Kristi Noem don't send out a press release complaining about EPA overreach, land grabs, and regulatory heavy-handedness.
     One example of EPA-hatred by the GOP surfaced today in that party's chief blogospheric honk Dakota War College, which unfailingly keeps its readers abreast of every opportunity for slamming the federal Agency and its mandates.  The site posted this morning that South Dakotans who are served by the Otter Tail Power company (in and around Milbank, per the company's website--along with a number of communities in ND and MN) will soon be seeing a 12% increase in their rates in order to pay for compliance with EPA regulations that are part of the so-called "war on coal."  
    A few posts prior, also dated today, has a press release denouncing another EPA proposal by Senator Thune.  Thune says that an Agency-proposed tax on ozone would be a "gut punch to low, middle income Americans."  He calls the plan a "disturbing, though not suprising" action from the Obama administration, that it's the "most expensive regulation in history," and notes that its timing on the "eve of the Thanksgiving holiday" makes it even more egregious.  
     As to Congresswoman Noem's contempt for EPA . . . whoooeee.  A week ago she tweeted that a proposed water management regulation was "one of the largest land grabs in our history," apparently unaware of land-annexation (read:  theft) events in the 19th century that my Indian friends could detail without much prompting.  Noem's hyper-reaction to the measure is typical of her rhetoric when it's aimed at the Environmental Protection Agency.  
     Considering Noem just won re-election with a huge majority and that Thune ran unopposed for re-election in 2012, we have to conclude that a sizable majority of South Dakotans are on the same page as these Agency haters when that scorn suits their economic and political needs.  
     But then what about the "love" side of the coin I alluded to in my lead?  Oh, believe me, there's plenty of love between South Dakotans and the EPA.  How so?  Can you spell E-T-H-A-N-O-L?  Honestly, for all of the contempt directed at the Agency by people in this state, how can they possibly criticize its mandate-authority when South Dakota's largest industry has gotten a giant boost by perhaps the EPA's biggest mandate of all--The Renewable Fuel Standard? EPA's "mandating" authority is in establishing and enforcing regulations required to support RFS.  It's undeniable that grain and oilseed prices (corn and soybeans, for the most part) have gotten significantly higher since the Renewable Fuel Standard requiring corn-based ethanol to become a significant percentage of motor fuel in this country went into effect a few years back.
    As a former grain trader and broker of many years standing, that conclusion is crystal clear to me and others in the trade.  For some academic corroboration, here's a 2012 study from the Ag Economics Department at UC-Davis that concludes that were it not for the RFS mandate, corn prices would be 40% lower.  Yes, prices have recently fallen, but believe me, they'd be much lower without ethanol demand propping them up.  And when corn prices go up, all grain and oilseed prices go up with them because of the substitution that results from users scrambling for supplies of other grains. Of some irony, Congresswoman Noem just got a "Friend of the Farm Bureau" award.  Guess which farm organization is the most strident in its support for the RFS and fights tooth and nail against any proposal to reduce it?   Yep, the Farm Bureau.  Do you suppose the honchos at the FB haven't gotten the word that their "Friend" cannot stand the very agency that makes the RFS possible?
     Apparently, EPA mandates that affect hundreds of millions of Americans while giving South Dakotans a huge economic gain are okay.  But when EPA turns around and directs mandates at us, how do we react?  With all the scorn and contempt that we can muster up.  So who cares if what's good for the mandate-loving goose is anathema to the mandate-hating gander?  Certainly not the political opportunists in our midst.  

Tuesday, November 25, 2014

I Hope Federal Judge Schreier Rejects The Motions For A Summary Judgement On The Gay Marriage Case In Front Of Her.

     I don't want to see a summary judgement by federal Judge Karen Schreier in the gay marriage case that's in her court right now. (Definition time:  summary judgment  is a judgment made by a judge for one party and against another party without a full trial).  A group of same sex couples is challenging South Dakota's ban on same-sex marriages in U.S. District Judge Schreier's court and both sides are now seeking a ruling by the judge, bypassing a trial altogether.  The plaintiff's in the case, the same-sex couples themselves, asked for summary judgement last Summer, and now today comes news that South Dakota's Attorney General wants the judge to reject that motion and act on his instead.  The legal niceties of the need for Schreier to reject the plaintiff's motion in order to act on the same motion made by the defendant go past me, but it's obvious that both sides want to skip a trial and get a ruling now.
     No doubt the opposite parties of this dispute have good reason for wanting to be done with the mechanics and time required by a trial. In general, from what I've followed of these things, I get a sense that summary judgements are made as a matter of efficiency.  They certainly save a lot of very expensive legal time, and I suppose in this case Judge Schreier has a good handle on what both sides have to say about their respective positions.  Probably, in those cases where the outcome doesn't affect anybody other than the parties involved, a summary judgement can be a useful and thrifty way of getting some resolution.
     But in a socially consequential matter like this one, I think the system owes the surrounding community more than a quick end to the dispute via summary judgement.  There is so much at stake here that I believe every argument, pro and con, should be aired out and broadcast to all of us for the consideration that's due from the court of public opinion.  We folks who will be affected forever by the outcome of this case, even as it will probably go to a higher court on appeal, should be aware, every step of the way, of all the elements of all the contentions and rebuttals made by each side. There's much drama here and it needs to be played out. High impact trials like this merit more than summary consideration by the court.
     When the Brown family sued the Topeka, Kansas, Board of Education in 1951, contending they were damaged by its segregated system, the case was initially tried in a Kansas federal district court. Testimony about psychological stigmatization was publicly aired, humanizing the damaging aftermath that wounded affected children. Though the court ultimately held for the Board of Education and its segregationist policies, the case went forward to the U.S. Supreme Court, where the ruling was reversed, ending public school segregation in this country forever.  But at the local level, Kansans got a first-hand understanding of the matter in a way that wouldn't have occurred had a summary judgement taken place before the trial.  I think we South Dakotans would get a firmer grasp of the full range of issues connected to same-sex marriage if we could see and hear our neighbors make their cases against our state's controlling authorities.
     I have no doubt that Judge Schreier's legal intellect and judicial temperament are of the highest caliber and that her judgement would stand the toughest scrutiny by her peers.  But in this case, cutting short the proceedings with an abruptly arbitrary judgement before the general public gets to hear the arguments presented in court is doing a disservice to the people who need to understand this case and consider it for themselves.

Monday, November 24, 2014

I'm Sensing A "Youth Movement" Emerging In Black Hills Political Circles. The Rest Of SD Should Take Notice.

     Just met with a small group of bright and motivated young professionals in downtown Rapid and came away mighty impressed.  Two were lawyers trained at one of the top law schools in the country, the third owns a small business.  All was casual and off-the-record, so no names nor genders for now, but I'm sure you'll hear plenty from these folks--and many like them--before too much longer.
     Though I wouldn't call what they're doing a crusade, it seems pretty clear to me that a certain amount of restlessness is growing among the politically attuned of their generation of South Dakotans. Though they tempermentally gravitate toward the Democratic Party, they're plenty frustrated by the inability of Dems to get it together and become a political force of some consequence in this state.  In fact, a reaction to my broadside against west-river Democrats in the RC Journal last week prompted one of them to contact me and ask for a meeting. And though they don't particularly reject Republicanism, they're wary of a political future in a South Dakota that is overwhelmingly dominated by a single party and the inevitable stasis that follows.
     Self-defined and -described as "progressives," they have a passion for South Dakota but are put off by what they see as a "culture of complacency" here.   They worry about a future for themselves and their families in a state where public education is so undervalued that it stands out as the place with the lowest-paid teachers in America; where we're net exporters of college-educated residents; where a chronic shortage of skilled and educated workers who appear to shun us hampers our economic growth prospects (Forbes just ranked us 45th in the country on that score); and where our state's elected officials are now scrambling to explain to us that years of mounting neglect have created a highway system suddenly in need of $500 million in order to bring it up to the standards that South Dakota must maintain in order to sustain its economic viability.
     Like me, they're concerned by the fact that the last election seems like a resounding success for the status quo.  And also like me, they're exasperated by the inability of the opposition party, the Democrats, to get its vision (if it even has a vision) of a different political modus operandi  across to voters. These folks are frustrated, they're restless, they're well-educated, and they're ready to work. Some stirrings of organization among them are occurring, a development that I intend to follow.

Saturday, November 22, 2014

Zounds, Sacre Bleu, Yikes and Oy Vey! South Dakota Is Slipping In The Forbes Rankings Of Best States For Business.

     That Republican-friendly journal of business affairs, Forbes Magazine, just reprised its annual survey of 50 states and ranked them on its "Best States For Business and Careers" list for 2014.  We come in at a respectable #14 on the list,  which grades the states on a number of criteria, coming up with an overall ranking that probably doesn't mean much to anybody other than those South Dakota public relations honks who are constantly touting our state's placement (usually very high) in lists of this nature.  Generally those lists are about "business-friendliness" or "-environment" or something similar. With some reason our chief economic development advocates, both inside and outside the government, frequently tout them while attempting to woo businesses and skilled workers into South Dakota.
     But as has been said in many other contexts, he who lives by business rankings dies by business rankings.  Among those who now have some 'splainin' to do is Governor Daugaard, who rarely lets a public appearance go by without bragging on last year's #1 ranking that South Dakota got from financial channel CNBC.  Forbes hasn't been quite so generous about its opinion on South Dakota's business climate, placing us at #11 and #12 during the past couple of years.  This year's slippage to #14 supports my general sense that South Dakota's economy has at best been drifting sideways for the past few years.  I wonder if CNBC will give us a #1 rating again this year, and if it does, will Governor Daugaard's promotion of the accolade contain a rhetorical asterisk noting that Forbes doesn't think quite so highly of us?
     In fact, our strongest showing among the ratings criteria in the Forbes list is, in a way, the most telling about our overall economic climate:  We're ranked #1 by Forbes for low business costs. That might be a come-on for some people, but to me, low cost goods and services reflect weak overall demand for them.  In a healthy, vibrant, growing economy I would expect business costs to be on the high side, not stagnating at the bottom of the barrel for lack of demand.  And if South Dakota's chronically low wages are, as I believe, the responsible component for our low-business-cost environment, I'd say that ranking is more a detriment than an asset. What career-minded individual wants to make a life in a low-wage place like that?
     Two other internal rankings in the Forbes list are also troublesome.  South Dakota is ranked #45 in growth prospects and #30 in quality of life.  The former is an assessment that would probably be a deal-killer for anybody using this list as a gauge for expanding a business into this state.  In its way it merges with that #30 ranking in SD's quality of life.  There doesn't seem to be much in the Forbes piece on criteria-determinants, but it's clear that in- and out-migration patterns in recent years show South Dakota is a net gainer of those with high school diplomas and less, a net loser of those with college and post-graduate degrees.  Nothing against those who haven't advanced their educations much beyond high school, but this trend basically tells us that people are expressing with their feet just how they feel about SD's growth prospects and quality of life.


Friday, November 21, 2014

I Engage Senator Thune's South Dakota Field Honcho Qusi Al-Haj On Immigration Policy. There's A South Dakota Angle To This.

     Just had a decent e-mail exchange over immigration policy with Qusi Al-Haj, the man in charge of Senator Thune's South Dakota offices.  What set it off was this observation by a mutual friend, who e-mailed it around to several people (enough for me to consider this on-the-record stuff), Al-Haj included.  Al-Haj's brief but well-taken observations and questions merit consideration, particularly from a South Dakotan's (that would be moi) perspective.  Said our mutual friend in his e-mail with the subject line "immigration speech:"
"We are and will always be a nation of immigrants.  It is our one common experience."
     To which I replied:  "I came over here on a boatload of postwar European refugees, among the last to be processed through Ellis Island in 1950.  We had nothing but a couple of suitcases full of clothes--and the infinite value of a future in America. You guys that know me see the results, and I was but one of millions who share the same story. I have no doubt that the many immigrants about to be institutionalized as part of this country will become a positive social and economic force that will benefit all Americans."
   Al-Haj's reply to the original sentiment:  "I agree.  We are also a nation of laws."
   My answer to Al-Haj:  "Laws are only as effective and meaningful as their enforcement, Qusi.  The jump in illegal immigrants that started around 2000 has stabilized at around 11 million, so this nation of laws has dropped the law enforcement ball millions of times in recent years, spanning at least two administrations.  Now what does this nation of laws do about it? Suddenly rediscovering the law isn't a way out.  Processing and integrating these illegals seems the only practical way of dealing with a status quo that is probably embedded in this country for the foreseeable future.  I'll address this in my blog today, directing at you in hopes of it getting passed along to Senator Thune."
   Al-Haj's challenging and thought-provoking response:  "John,
Two other questions to raise: Fairness to those who have been waiting legally in line for over a decade?
How can we prevent another 11 million challenge in the future?"
   My response:  "Qusi, fairness was one of the first casualties of American immigration policy dating back to the 19th century.  For a recent example, given that we live by the universal principle of equal treatment under the law, the EB-5 visa program (supported by Senator Thune) is tilted unequally in favor of the wealthy.  Why is it fair that people of means get to step to the head of the "green card" line when everybody else either waits their turn or has to find a way to enter illegally?  To answer your direct question, it isn't fair, but if Senator Thune and his colleagues put their minds to it, I have no doubt that the backlog of immigrants awaiting entry can be relieved by a quicker processing method than now exists.  Consider that South Dakota has a serious labor shortage, similar to those in Iowa and Nebraska according to recent news.  We can use some of those backlogged immigrants.  Tell Senator Thune to get a move on!  As to prevention down the road.  I don't know how to do it, but then I wasn't elected to the United States Senate on the premise that I can solve problems like this. Take the last word here.  See you at lunch.  P.S. I think some or all of this exchange will show up in my blog today. Thanks for squeezing it out of me! Best wishes, John"


Thursday, November 20, 2014

My Column In Yesterday's Rapid City Journal: "Democrats Are In A Shambles"

     "That the South Dakota Democratic Party is a shambles was starkly affirmed a couple of weeks ago at the polls.  That Democrats in the Rapid City region are in need of a rhetorical spanking was affirmed to me a few weeks prior to that when the Rapid City Area Chamber of Commerce organized a forum to discuss election issues.  My conclusion now that the post-election dust is settling? Dems have good reason to be demoralized--but they have no excuse for indifference. 
     Here’s what happened at that forum.  The committed folks (kudos to you C of C types, by the way) at the Chamber set up a public gathering focused on two ballot measures, IM 17 (the “Patient Choice” initiative) and IM 18 (the proposed minimum wage increase).  Spokespeople for and against were invited to come out and speak their pieces.  Regarding the first issue, two local physicians, outstanding in their fields and passionate in their respective regard and disregard for IM 17 made excellent cases for their positions.  The complicated initiative was clearly explained and the competing arguments were distilled to the point where complexity and confusion devolved into clarity.  Attendees got a decent enough grasp of the measure’s elements to make an informed decision about their votes. A big bravo to all involved.
     Then came time to hash out the many issues and scenarios that would result from passage of IM 18, the minimum wage hike.  Opposition to the measure was spearheaded by the Pierre-based South Dakota Retailers Association, which sent an articulate representative all the way to Rapid City to make a very good case against the measure.  Being a supporter of IM 18 myself, I was looking forward to hearing a Democrat lay out the reasons this thing needed passage.  As Dems were instrumental in the measure’s placement on the ballot, the party was unified in its support for it.  But to the local Dems' embarrassment, the moderator explained that the Chamber had contacted the local Democratic organization and invited a speaker to appear,  but not a single soul showed up.
     Talk about rude, not to mention dumb.  This was a well-publicized forum that got plenty of advance media coverage.  Voters seeking informed arguments on an important ballot issue took time off to attend.  Two busy physicians made it their business to come and speak.  One gentleman from SDRA made a 300-mile round trip to fulfill his group’s rightful regard for its public obligation to speak out.  But did even one local Democrat think it was worth the bother to take a couple of hours and make a case for this ultra-important measure?  Nope.  Not one. 
     West-river Dems, you blew it, big time. I’m actually mad about it on two fronts.  First, you wasted a great opportunity.  Second, you wasted my time.  If this is a microcosmic reflection of what’s happening in Democratic organizations throughout South Dakota, your party just got the shellacking it deserved.  It’s time to grab that act of yours and clean it up." 

Tuesday, November 18, 2014

Has Senator Thune Suddenly Become The Darling Of Environmentalists?

     Was Thune speaking offhandedly or with some calculation when he told Chris Wallace on Fox News Sunday over the weekend that . . . "climate change is occurring, it's always occurring, Chris. There are a number of factors that contribue to that, including human activity. The question is, what are we going to do about it and at what cost?" 
      Though the comment didn't necessarily whiz by me, I didn't give it much thought. Certainly didn't seem like a breakthrough sentiment, mainly because I've always thought of Thune as generally level-headed and willing to keep an open mind about things, at least within political parameters.  But suddenly all the buzz created by the statement is flying around the internet and South Dakota's blogosphere.  It sure didn't miss the attention of the editors of the Washington Post, who treated it like a major political story yesterday, actually calling Thune's comment a "bow to scientists" on climate change.  The subtle slam against Thune, making him out to be some kind of a hayseed who suddenly discovered scientific inquiry notwithstanding, the real story is that Thune has broken irreversibly with standard GOP dogma on this.
     That dogma is best expressed by the position on climate change taken in 2012. The Republican Platform was explicit in its refusal to concede that human activity was a proven cause of climate change.  You can scour the platform yourself and find this phrase in the section on climate change:  "the causes and long range effects of [climate change] are uncertain."  Get that? Just two short years ago the official position of the Republican Party was unequivocally opposed to labeling human activity as a cause of climate change.  Over the weekend, our Senator John Thune threw that uncompromising position aside and said that "human activity" does indeed--along with other factors--contribute to climate change.
     No doubt a lot of the speculation on this is focused on the implications for a future run at the White House.  But whether it hints at Presidential ambitions or not, Thune's comments will no doubt have some consequences here among his constituents.  His strong pro-Keystone XL position and his intention to vote for it when the measure comes up in the Senate dovetails with his long-standing antagonism toward the Environmental Protection Agency and his many statements about EPA overreach and land-grabs. That Thune is now embracing a key element of the climate change "manual" may well endear him to an important sector of a national constituency. But it will probably do so at the cost of setting off alarms with many of his Republican supporters here in South Dakota. 
     I know that if I'm a farmer or rancher here, currently worried sick about the EPA asserting its water standards authority over every gully and low spot on my property, I'm depending on Thune to block the Agency's intentions.  Now all of a sudden when I'm hearing him making nice with environmentalists and being celebrated in the Washington Post for doing so, I'm gettting a bit concerned.  If Thune develops a "human-activity-causes-climate-change" persona while reaching for a broad, national constituency, I know he'll have to back it up with some legislative action.   Will he cave on the EPA's lowering of ozone standards?  What about the wetlands land-grab by the agency?  And then there's Keystone XL.   
     If I'm that farmer, I'd hate to think it, but couldn't help musing, is Thune turning into a RINO?  I'd have to wonder.  One thing I know for sure, I'll be paying close attention to developments following Thune's sudden "bow to the scientists," which WaPo, one of the EPA's strongest media advocates, refers to as "a glimmer of hope." My first Q:  Hope for whom?   

Saturday, November 15, 2014

Qs Raised By EB-5 About Relationship Between Bollen And SD's University System. Retired NSU Prof David Newquist Lays 'Em Out.

     I pulled this from the comments section at Cory Heidelberger's Madville Times this morning. On element after element (this is just one of many),  MT has done a yeoman's job of sifting through and analyzing  a long and complex exchange that just occurred between the South Dakota State Legislature's Government Operations and Audit Committee and Joop Bollen. Bollen is the central figure in the year-long scandal (now being actively investigated by the FBI) that has been underway regarding the federal "cash for green cards" EB-5 immigration program and how it was operated in South Dakota during Mike Rounds' tenure as governor a few years back.  The committee sent Bollen 75 questions as part of its recent investigation into the matter.  Bollen's written replies merit some close scrutiny. A significant result of the exchange is that more questions are raised, more issues are brought to the surface.  At issue for Mr. Newquist (retired Professor at South Dakota's Northern State University in Aberdeen, where most of Bollen's questionable activities took place) is the relationship between Bollen's agency, The South Dakota International Business Institute (SDIBI), and its overseers in the SD university system, principally the NSU administration and ultimately the South Dakota Board of Regents. Newquist gave me the go-ahead to cut and paste his comments here.  One note:  Northern Beef Packers was the financially ruinous (to the tune of more than $100 million) meat-packing plant in Aberdeen that went under a couple of years ago.  The bankrupt firm was developed by SDIBI and created the interest in and investigation of the EB-5 program.  Newquist's comments:

"From its inception, the SDIBI was a matter of puzzlement and concern throughout the state higher education system. Its purpose seemed to be to offer students a high-powered academic experience in how international business works and is conducted. Some early efforts did make contacts with foreign universities, but they never seemed to produce for students to study, research, and gain knowledge and understanding of how to engage in international business. A clue might be in the fact that the only students in the international business program to be multi-lingual were the foreign students, and their academic experience at NSU did not seem to give them much in the way of an entrance into international business. From the outset, the SDIBI under Bollen tended toward an obsession with making contacts for wheeling and dealing in finances. And that raises the questions about Bollen and the SDIBI that have never been answered:
• When you have provisions in state law that create economic development agencies, why did the Regents get involved in these financing schemes in the first place?
• What role did the raising of EB-5 funds play in providing research and teaching opportunities for professors and study experiences for students?
• When professors and administrators are closely monitored to insure that their work advances the stated mission of the colleges, why was Bollen exempted from the established practices of accountability?
• Who in the Regental system was Bollen’s sponsor so that he was exempted from reporting to the department chair, the dean, and the university president.
It was known throughout the community, that Northern Beef Packers was plagued with bad management and did not establish the most basic measures for accounting and setting priorities. If the SDIBI was part of the university as it got involved with NBP, why wasn’t the expertise of faculty in accounting and management consulted regarding the management of the investments in the plant? Bollen complains that no one at the university or in the Regents office wanted to carry the EB-5 program forward. But there is nothing in the mission of the university or the Board that authorizes higher education to act as an investment procurer or broker. So, how did Bollen get so entrenched that he was exempted from all disciplinary measures so that he could help with a law suit which cost the Regents over a half million in legal fees even though they weren’t held liable?
When the current university president examined the relationship of the SDIBI to the university, he saw the huge discrepancy between what the SDIBI was and what a university program must be to be part of a higher education enterprise. Bollen was totally wrong-headed about the SDIBI and its function as part of a university.
Under whose auspices was he allowed to operate in the way that he did? That question underlies all."

Thursday, November 13, 2014

Governor Daugaard, These Trends Are Not Our Friends.

     With good political reason, Governor Daugaard has been touting what he considers to be the successes of his administration for the past umpteen months.  It's a shame that the limp-wristed candidacy of Democrat Susan Wismer couldn't have made a more forceful counter argument during the just-ended campaign, because some facts about the state and direction of South Dakota belie Daugaard's self-congratulatory rhetoric.  While his vaunted claims of economic growth are probably statistically supported, it seems obvious to me that the growth has been concentrated in the relatively compartmentalized ag sector, given that grain and livestock prices have had several very good years.
     Nothing wrong with the fact that a lot of great South Dakotans are doing very well these days.  It's a wonderful turn of economic events for some of the hardest working and most decent people I've ever known, especially considering how hard they toiled for literally decades before this excellent market for $2+ calves and "beans in the teens" came to fruition.  More power to 'em, and I really mean that.
     The problem is that the spillover effects into South Dakota's general economy seem to be marginal at best, nonexistent at worst.  In yesterday's post I supplied some data from the U.S. Bureau of Labor Statistics that showed the job growth rate for the past couple of years in South Dakota has been about half the national rate (a fraction of a percent for us, nearly 2 percent for the U.S. as a whole).  This is anemic from the get-go, but it looks even more pallid when considering that South Dakota, in Daugaard's view, has been having strong economic growth during his term.
     Now comes news that's even more disconcerting, considering that captain Daugaard's ship is supposedly plying the economic waves at full speed ahead.  The poverty rate in South Dakota last year increased by about a half-a-percent, while here in the Black Hills it jumped by an astounding 3.3%, or nearly 6,000 people who will add significantly to the strain on local welfare agencies.  The Black Hills Knowledge Network's graph in the link (sourced out to the U.S. Census Bureau) shows another fact that should be of some concern to those who want to pat themselves on the back over South Dakota's "economic boom":  While our poverty rate has been going up per the latest data, the overall rate in the United States has been going down.
     As if sub-par job growth and a negative contra-trend in poverty rates aren't challenging enough to the rosy image presented to us by Daugaard, here's the one that should be, if anything, more troubling.  If you check out page 12 of this comprehensive report  on South Dakota's labor imbalances completed this year by Philadelphia's Drexel University, you'll see a U.S. Census Bureau table that shows a rather unsettling trend from 2008-2012: South Dakota is a net importer of folks with high school diplomas or less, a net exporter of those with Associate degrees or higher.  And the differences aren't just marginal, reaching into the 5%-6% range in both cases.  Considering that the report shows that almost 40% of South Dakota's population growth comes from in-migration, a continuation of this trend will result in a workforce that is heavily overweighted with a population that has little-to-marginal educational attainment.  Not a good thing in a state that is chronically short of skilled and well-educated workers.
     I appreciate that Daugaard made a pro-forma attempt at addressing these issues with a "Workforce Summit" program. I doubt that it will yield significant results because its conclusion didn't bother to mention low wages as being part of the problem.  Daugaard's campaign-colored, facile display of data that indicates South Dakota has been advancing briskly on the economic front notwithstanding, it seems obvious that those "gains" haven't done much to improve life on the streets.  I look forward to the Governor addressing these issues, up front and post haste as his second term gets underway.

Wednesday, November 12, 2014

Good To See That South Dakota Retailers Won't Fight The Minimum Wage Hike. Hoping Our Elected Officials Feel The Same Way. Let's Give This Demand-Side Initiative A Chance To Play Out.

     Okay, we get that South Dakota has long been rated as a great place to do business. Governor Daugaard touts our consistent standing in those rankings as evidence of what a great job our elected officials have been doing. That's just wonderful, of course, but the fact that we're supposedly such a great state for doing business doesn't mean much when lackluster economic results follow suit. For example, in this nationwide study using U.S. Bureau of Labor Statistics from the University of Arizona, South Dakota's job growth ranking from early '13 through early '14 is at a lowly #40. An up-to-date (also based on BLS data) results is just as disheartening:  While job growth nationally so far this year has been around 1.8%, South Dakota's increase has been a fraction of  1%. Granted, these are narrow windows both in time and scope, so for a broader perspective I went to Business Insider, which ranked us #27 in overall economic performance in "recent years."  That's considerably better than BLS job creation results, but still keeps us in the bottom half of the country.
     Governor Daugaard's pride isn't supported by economic results.  South Dakota's traditional supply-side emphasis in tax (no corporate or personal income tax) and spending (lots of economic stimulus programs in the Governor's Office of Economic Development) policies hasn't produced much better than so-so results.
     It's long past time for a change of emphasis, and that is just what we got last week when voters approved a minimum-wage increase with cost-of-living adjustments built into it.  This demand-side initiative will put more money into the hands of about 77,000 South Dakotans (17% of a workforce of 450,000), per the non-partisan South Dakota Budget and Policy Institute.  My guess is that somebody at the South Dakota Retailers Association, which fought the initiative, realized that 77,000 South Dakotans who will suddenly have about $200/month more to spend equals a $15 million a month upside spending bump going right into the coffers of those retailers themselves.  As a dues-paying member in good standing of SDRA, I'm definitely okay with that.  The announcement in the past day or so that SDRA won't carry the fight into the 2015 legislative session signals a welcome willingness to wait and see how the results of the measure play out.
     There's been some blogospheric discussion--too scattered and numerous to list here--about Governor Daugaard's intentions toward the new law when the legislature meets in January.  I think the Governor would do well to let this one move into the state's economy without taking a stand one way or the other when and if it comes up spontaneously among the legislators themselves. Our supply-side-infatuated political culture hasn't produced anything noteworthy in the way of comparative results.  This new measure should be given a chance to prove itself, not only on how it impacts the economic lives of tens of thousands of our fellow South Dakotans, but on the purely economic terms that are so near and dear to our Republican hearts.

Monday, November 10, 2014

Functioning Roads In SD Mean Higher Taxes. But Putting The Bite On Users? Not Such A Great Idea. And By The Way, How Come We're Just Now Getting Some Hard Numbers On This?

     Looks like South Dakota will have to pop for something on the order of $400-$500 million worth of road repairs over the next decade or so.  So says State Senator Mike Vehle (R) from Mitchell, who heads up a legislative committee that's been studying this since last Summer and has just turned in a report that goes before a state board this week.  I guess my first question is, why hasn't the penuriously-natured Governor Daugaard anticipated this sizable bite and set aside some kind of reserve for it?  Everybody knows that roads and bridges all over this country, particularly in our rural states, are in tough shape, and if memory serves we've been hearing about this phenomenon in South Dakota for the past few years. A report put out in 2013 by the American Society of Civil Engineers showed that 26% of our bridges are functionally deficient or structually obsolete and that 61% of our roads are in poor or mediocre condition.   Now all of a sudden a team of elected officials goes out there and discovers we've got a half-billion dollar fix-up job staring us in the face?
     My guess is that a sizable reserve set-aside (it doesn't have to be cash, just a notation that it's some sort of contingent liability as an adjunct to the budget would have sufficed) for road repair would have taken much of the luster off Daugaard's carefully constructed "balanced budgets," the pride of his re-election campaign.  Accountants have their own ways of doing things, but the net result should have been some indication that we South Dakotans will have to pony up for some serious bucks in coming years.  I don't recall being informed of such, and now our elected officials are tasked with the burden of how to raise all that dough.
     Along with that comes the huge political hassle of figuring out who will pay for the work. I get the sense from the KELO story that Vehle's committee is taking the "pay-to-play" approach, generally putting the burden on those who most use the roads, which I suppose has a certain ring of fairness to it.  People that most directly gain the benefit of good roadways seem like a reasonable target for raising the money to keep them up.  But as Rep. Jim Peterson (D) of Revillo notes, the committee's recommendations are "too high of a burden on Ag."  That's a sentiment I have to agree with.  As it stands, I think the Ag industry in this state gets a sweet deal on sales tax exemptions, to the tune of more than $200 million a year, per this 2013 report for the South Dakota Department of Revenue.  I'd be the first to say that these (and another $300 million/yr's worth of exemptions scattered among numerous other industry groups) could stand some review.
     But where sales tax exemptions are probably a historically justified "underload" that could use some review in the context of current economic conditions, I think putting a disproportionate burden on the Ag sector for road maintenance is an "overload."  To my way of thinking, roads are the essence of South Dakota's economy, which is based on movement of goods and people (tourist types in particular, who come here by the millions).  There is such an enormous spillover economic effect from these two primary industries that virtually every South Dakotan directly benefits from them.  This is why I think the cost of maintaining the arteries that pump the lifeblood of money into this body politic of ours should be supported by the whole of the system that exists because of them. While this isn't necessarily the case in the big, urban states where entire sub-economies exist with little or no dependence on highways, South Dakotans are symbiotically dependent on their roads in order to hold their state and economy together.
     And one more thing.  Equalizing the burden spreads the awareness of the cost out over the population.  In a one-person, one-vote society, this sense of individual ownership lends itself to individual oversight--and that has to be a good thing.

Friday, November 7, 2014

Things Just Keep Bollen Along.

     Hard to believe, but the South Dakota International Business Institute (SDIBI) website is still up.  It's difficult to get a feel for its currency, but it references activities that occurred in '07, so there's definitely some relevance to this ill-starred economic development program, whose troubles began about that time.  SDIBI, which is operationally defunct, is where the EB-5 scandal was midwifed, turning the "cash for green cards" program that took serious chunks of money (in units of $500 grand) from foreign investors in exchange for legal and permanent residency status for them and their families. The South Dakota component of the federal program went awry when the director Joop Bollen, while running it for the State of South Dakota, turned it into a money spigot for himself by creating a management company to run it for the state. He did so on his own, without any authorization from his bosses, the Governor's Office of Economic Development and the South Dakota Board of Regents, who claim ignorance of Bollen's activities.  Said management company, SDRC, inc., subsequently charged investors (over and above their investments in business ventures) fees that may well have run up to over $100 million, money that could just as easily have been earned by the State of South Dakota had Bollen stuck to his job as a state employee and turned over those fees to the state. The thing has turned so nasty that the FBI is "actively" investigating it.
     Meantime, the South Dakota state legislature's Government Operations and Audit Committee has been taking a look at this and wants Bollen to answer a few questions.   GOAC just sent a request (hard to believe the committee can't find a way to make Bollen actually show up for the hearing, scheduled for next week) to Bollen, asking him to provide written answers to a whole bunch of questions, 75 to be exact, related to the matter.  I'm sure Bollen is so lawyered-up at this point that substantive answers to the questions posed by GOAC will probably be scarcer than hen's teeth, but elected officials are probably duty-bound by now to at least make a pro forma attempt at finding out just exactly what happened.
     In the process, I hope the SDIBI website gets a look.  Anybody trying to take it down should know I've printed all of it.  Don't know how incriminating it is, but it sure makes for some interesting reading.  On the site's homepage it says that Joop Bollen's company "SDRC, inc., established in late 2007, is the overarching management company" that runs South Dakota's EB-5 program. Bollen is not identified as a principal, a manager, an employee, nothing, of SDRC, Inc. Then, a few pages into the site there's a form letter addressed "Dear Potential EB-5 investor" and signed by "Joop Bollen Director, SDIBI." So as far as anybody knows from scanning the site, Bollen is the State of South Dakota's employee overseeing the EB-5 program that is managed by a company named SDRC, inc. No one knows that SDRC, inc. is actually Bollen himself.
     Now get this.  A few sentences into the letter, Joop Bollen, writing as the state's director of the program, tells potential investors that "South Dakota's regional center is truly a state government run regional center where economic development is the reward and not profit for the company which manages the regional center!!"  The italics are mine.  The double exclamation points are Bollen's. Talk about chutzpah.  The whole point of Bollen's scheme was to rake in profits for "the company (SDRC, inc.) which manages the regional center"--profits to the tune of $100 million-plus if the Center for Immigration Studies' analysis is correct.  In addition to keeping the State of South Dakota in the dark, Bollen was pulling a fast one on the unsuspecting foreign investors by charging them sizable fees under the guise of collecting that money for the state.
     Oh, and one last thing.  Toward the end of this letter, Bollen notes that "South Dakota's federal representatives and high ranking state officials understand the benefits of EB-5 has provided to our State and are willing to assist or intervene when and if deemed necessary." (I'm quoting verbatim. The syntactical and grammatical fluffs in the preceding quotes come courtesy of the letter writer, who has a tenuous grasp of English.) That last comment makes me wonder if South Dakota's elected and appointed state and federal officials have a clue about how they were used to support and legitimize Bollen's plot, which continues to thicken with every successive revelation.

Addendum (posted 11/8 @ 0950 MST):  Retired Northern State University (where SDIBI operated before Bollen went rogue)  Professor David Newquist and I had similar bizarre results when we tried accessing SDIBI's link to its own site.  Here's Newquist's piece on it.

Thursday, November 6, 2014

South Dakota's Labor Shortage Is Symptomatic Of A Much Larger Problem

     Not sure why and how Philadelphia's Drexel University sought to do a study on South Dakota's labor markets earlier this year, but study us they did.  In a long (101 pages) and data-filled (it relies heavily on U.S. Census Bureau data) report dated February, 2014, university researchers drew some conclusions that say a lot about our state's labor force. I wonder if this is what Governor Daugaard read earlier this year when he deemed the labor shortage in South Dakota a top priority and has taken some steps to alleviate it. Daugaard also held a series of "workforce summits" throughout the state this year, drawing the results into a report that falls far short of its potential, considering that it ignores one of the most important elements of job development in this state:  our low wage structure.
     Anyway, the Drexel U. report's findings are sobering and probably something of an indictment of the kind of leadership we've been experiencing in our Republican-dominated state government for, oh, the last umpteen number of years. I believe the state's relentless focus on making us a business-friendly environment has led to some mistaken assumption that low wages are a come-on for potential employers seeking to expand their businesses into South Dakota.  I think this is nuts, because low wages are consistent with slow growth environments, at least according to everything I've observed after living in both urban and rural states for about 7 decades. That the GOP pretty much ran the table in this week's low-turnout election says much about the general complacency that exists in South Dakota with regard to a labor and population situation that is trending in the wrong direction.  I believe Daugaard has sensed that the labor shortage is a sign that the ship is listing and that his sudden concern about it is a way of righting the vessel called South Dakota.  Reading this report, I can understand the Governor's urgency.
      According to the Drexel University report's executive summary, a labor shortage in South Dakota indeed exists. Later it observes that  "mismatches between the education, abilities, knowledge and skills of job seekers and those required by employers who want to fill specific occupational job openings" can play a role.  The study then proceeds to analyze a ton of demographic data to seek an explanation as to why our chronic labor shortage won't go away.  Among its findings: South Dakota ranks 4th among all states in the share (roughly half) of those born here who now reside in another state.  I have no clue what the mean percentage is among other states, but find it astonishing that half the people born in South Dakota now choose to live elsewhere.
     Conversely, South Dakota does have a population growth rate that is fairly strong.  Turns out that 38% of our population growth comes from in-migration. That's the good news.  The bad news? Our educational attainment of in-migrants compared to out-migrants is weighted heavily toward those with high school diplomas or less.  In other words, we're a net importer of those with h.s. diplomas or less, a net exporter of those with bachelor's and post-graduate degrees. Nothing against folks who for one reason or another couldn't get past high school, but you have to wonder what the draw is for them in South Dakota even as we have a net loss of college graduates in this state.
     We Republicans can rightfully hoot and holler about this week's smashing electoral triumph, but numbers like these are enough to pull the punchbowl out of the festivities.  Time to sober up, Pubs.  Our party has a state to run and a legacy to leave for those of our kids and grandkids who choose to remain here.

Dem Issues Can Win . . . But Dems Can't. What's Up With That?

     Our minimum wage issue, IM 18, won handily by a 55-45 margin this week. In its way, that seems like a victory for Democrats, or at least the Democratic economic world view.  On IM 17, the "patient choice" initiative that passed by about 2-to-1, my friend Cory Heidelberger over at his excellent and informative blog The Madville Times, thinks that the victory also comports with the Democratic way of looking at things, calling it an "example of sensible government regulation giving South Dakotans more healthcare choices, not less."  Though I disagree, the fact that Democrats embrace these measures as wins consistent with their view of government creating better things for the general population suggests that they're missing something. Voters are not entirely disconnected from using the electoral process as a means of turning bread-and-butter issues like wages and healthcare in their favor. So if Dem issues can win, why can't Dem candidates?
      This isn't a question that's unique to South Dakota.  A Chicago friend writes that "Illinois had a measure to raise the minimum wage to $10, and it won easily. There was a background checks measure that won easily as well as a measure to require companies to provide mandatory birth control as part of their health plans. We had a governor [losing incumbent Democratic Governor Pat Quinn] in a blue state with plenty of financial backing who ran on all of those things and ran ads quoting his opponent as wanting to get rid of minimum wage. It didn't help him at all."  Meantime, minimum wage hikes won in Nebraska, Alaska, and Arkansas--all of them, like South Dakota, red states that sent Republicans to Congress this week.
     As far as South Dakota is concerned, I think that IM 18's passage will prove to have much more of an impact on the day-to-day economic lives of residents than who we elected to state and federal offices.  Elected officials come and go, but the recently enacted minimum wage hike will last in perpetuity, particularly if its built in Cost Of Living Adjustment survives any future legislative or electoral challenges.  On a macro level, the state itself will see some economic gains from the newly unleashed $15 million a month of spending cash that will materialize as soon as the onset of higher wages start flowing through the economy.  That measures like this, championed wholeheartedly by Democrats, can win should be bracing for Dems.  Why their candidates can't follow suit should be dismaying.
     I think a lot of it has to do with the ideologically-saturated themes that have come from the party, at least here in South Dakota.  I've said enough about my disdain for Rick Weiland's "Take It Back" campaign, which seemed more about class conflict than anything else.  Meantime Corinna Robinson's opening pitch begins with the phrase "as a nation."  Not a good start for voters focused on bread-and-butter matters that affect them directly.  Susan Wismer's self-aggrandizing announcement for Governor tells us that because she grew up on a farm she knows about hard work and responsibility. Yay, and bully bully. Unfortunately, for each of them the words "jobs, education, healthcare" should have been in their leads, not lost in the verbal congestion of their policy positions.
     Robert Reich, formerly a Clinton administration cabinet member and currently an Economics Prof at Berkeley took note of this situation this morning and commented:  
"Minimum wage hikes were approved Tuesday by margins of 60 to 70 percent in South Dakota, Nebraska, Alaska, and Arkansas – the same “red” states that sent Republicans to the House and Senate. What this tells me is voters are more concerned about jobs and wages than ideology. They don’t vote against their interests, but they don’t see Democratic politicians responding to their interests. They want action on lousy pay, unpredictable hours, lack of childcare and paid sick leave, arbitrary firings, and runaway CEO pay. Speak to these, and even in “red” state voters will support you."
    I think Reich has it right.  Dems need to get off their high horses and start focusing on the day-to-day stuff that matters to people.  

Wednesday, November 5, 2014

Mr. Smith Doesn't Go To Washington.

      Mike Rounds does.  The status quo is jubilant, as it should be, considering that Rounds goes with the blessings of a smidge over 50% of us.  Though far short of the convincing margins won by Daugaard and Noem, Rounds's showing in what was effectively a 3-way race can reasonably be called a mandate.  It looks to me like a combo of a national GOP surge, a relentless anti-Obama attack by his campaign and an inherently weak pair of opponents--Pressler weakened by no money, Weiland weakened by a campaign theme ("Take It Back") that I've previously described as "vapid," "banal," and "overly thematic"--came together for Rounds.  On that last element, my sense is that a lot of Rounds voters were seriously considering looking elsewhere (he was in a nearly three-way dead heat in polls just a few weeks ago), but found Pressler and Weiland unsuitable, so they migrated back to the known quantity, the lesser of three evils.
     Now for the pre-mortem.  First off, the FBI's "active" investigation of EB-5 goes on.  With it comes even more scrutiny from the media, now to include the national outlets whose interest will be piqued by Rounds' Senator-elect status.  At some point this will probably encumber Rounds as he settles in to D.C., either via heightened scrutiny by the Senate Ethics Committee, which by rule has an equal number of members from each party, or simply by the overall negative impact of all the media noise surrounding him.  Yes, much of it is politically driven, but the distractions will be real enough, especially as everybody awaits and observes during the course of the federal investigation.
     Meantime, local interest in this thing won't vanish just because Rounds got elected.  His character has been revealed, enough so to be called into question by editorialists at the state's largest papers.  Though half the voters in the state didn't deem it enough of an issue to withhold their votes, a good share of us, maybe half, would beg to differ.  We're still waiting on an accounting of how as much as $140 million dollars that was channeled through the EB-5 program in South Dakota was disposed.
     On a more practical political front, Rounds' promise to reject and repeal President Obama's agenda bears scrutiny, issue by issue.  His U.S. House counterpart Kristi Noem blew it big time a year ago when she put party over her constituents by voting to shut down the U.S. Government, including all of South Dakota's National Parks at the height of the Autumn tourist season.  If Rounds' professed hatred for all things Obama leads him to follow the GOP agenda without consideration of his constituents' interests, he'll get as blasted as Noem did after her ill-conceived rapture with national ideology last year.
     An all-GOP delegation to Congress should warm the hearts of all South Dakota Republicans, but it does have a downside.  Nobody from here will caucus with Democrats when it comes to representing South Dakota on their side of the aisle.  I'm sure the macho-Pubs in our party are saying "so what?", but the fact is we'll be voiceless on some issues that Dems are likely to prevail on.  To that extent, Rounds and the rest of SD's GOP trio in Congress will be challenged to make sure that South Dakota's interests get some bi-partisan attention. I'm dubious that the built-in Obama-hatred that Rounds takes with him to D.C. will help him out much as he masters the art of legislating, which calls for compromise, not confrontation--but he is the new Senator.  My doubts notwithstanding, I wish him well.

Tuesday, November 4, 2014

I Hope South Dakota Democrats Look Westward For Some Energy And Leadership.

     Okay, so the polls have yet to close and I'm premature, but it sure seems obvious that the South Dakota Democratic Party is about to get a drubbing in all the statewide races.  Weiland might yet come through and prove the exception, but even if he pulls it off, his D.C. orientation won't give the party itself the benefit of much influence via elected and appointed officials creating little spheres of influence around Pierre and the rest of the state.  From out here in west river it looks especially bleak.  I attended a Rapid City Area Chamber Of Commerce-sponsored symposium a few weeks back at which ballot issues in today's election were being discussed.  Much to my chagrin and even disgust, the Chamber's emcee announced that the local Democratic organization (Pennington County, I assumed) had been asked to send a representative to speak in favor of IM 18, the cost-of-living increase item on the ballot today, and nobody even freakin' showed up!  
     As a long-time Republican, I suppose I should have reacted with a smirk, as I'm sure many of my fellow Pubs did.  But I was more angered by the local Dems' indifferent reaction to the invitation and somewhat embarrassed for them to boot.  This made the state's "loyal opposition" party look plenty bad, and I think it ruined the event's purpose, which was to make us local folks better-informed about an important, contentious, and far-reaching issue, both in scope and persistence, given its built-in cost-of-living-increase component.  Democrats love this issue and have been pushing it relentlessly.  Why their local organization in South Dakota's second largest metro area couldn't muster up one person to come and speak in favor of it at a high-profile venue (there were plenty of local print and broadcast media on the premises) is a question that state Dems need to ask themselves.
     I'm guessing it's because the state's Democratic Party leadership has written off west river and that local Dems feel isolated if not altogether abandoned by their party.  This is a huge mistake.  Two years ago I helped an Independent candidate run against Phil Jensen in what most South Dakotans must consider one of the reddest districts in the state.  That my candidate got something like 42% of the vote should tell anyone that there's a solid block of voters out here who do not automatically vote Republican.
     More tellingly, I saw next to nothing in the way of appearances by Susan Wismer out here.   That she barely campaigned is one thing.  That she wasn't available to give local Democrats some visible support made her AWOL with respect to her de facto role as party leader.  I never did like the way the state's Dems effectively crowned her last Winter, barely giving Rapid City's Joe Lowe a mention, even though he'd been running for months before SDDP gave Wismer its splashy rolloutMeanwhile, I know Joe Lowe well enough to assure every Democrat in this state that he would be a tremendous asset to the party.  In addition to presence and gumption, Lowe has a wealth of hands-on experience in South Dakota state government, recently completing a long career after having been wooed by Bill Janklow to come to the state and take over as head fire-fighter.  Janklow found Lowe after Joe had already served as mayor of a medium-sized city in Orange County, California. The man knows something about government.
    Besides Joe, I know plenty of west river Democrats who could bring talent, energy and money into the party.  Dem honchos would be smart to find a way to ingratiate themselves to these folks and start developing something that looks like a base west of the Missouri River.