Maybe.
At first glance, I see Nevada and Florida, ranked 4th and 5th, respectively for best business environments.
Let's see Nevada's unemployment is...the worst in the country. Google "Nevada's Unemployment". And, it just keeps getting worse.
Florida's unemployment rate was 12% in December, 2010, according to the Bureau of Labor Statistics. That's compared to 9.8% nationwide. Unemployment figures by the BLS omit those whose unemployment benefits have expired.
But wait for it....now look at the a recent chart that shows those mortgages underwater, meaning the amount the homeowner owes on their mortgage loan is greater than the value of the home.
via cr4re.com
Whose at the top, er, bottom of this list? Nevada at #1 and Florida at #2. They have the highest percentages of homeowners* with mortgage negative equity.
There's that cognitive dissonance.
How does a state with a great business environment turn around and create the worst environment for employment and home ownership?
Who gets the return on that investment for creating such a favorable environment for business?
So how long can businesses sustain year-over-year profit growth if generating unemployment is their means to success?
Now let's consider Iowa*. Ok. Iowa's unemployment rate is 6.1% in December 2010. That's half of Florida's.
Oh. And land prices in Iowa are at or near record highs. How's those real estate prices going for you in Florida?
And, underwater mortgages? We're near the bottom.
And, this chart is about profit growth and low corporate taxes. Ok.
How long can businesses sustain year-over-year profit growth if there results are reported as record levels of unemployment and record levels of negative equity mortgages?
That is not a path that takes us to a future. That's a path that takes us to an end.
* And yes, Iowa has its own challenges in creating a sustainable business environment with attractive jobs to keep the children who benefit from the state's great public education system from leaving. But, we're getting better at it.
I didn't expect to find Iowa showing so high on the results that indicate a strong, sustainable, economy. I have been one to poo-poo some of our policies.
At some point...there's no one to buy because either they are out of work, under-water with their mortgage (or both) and the kids have all gone to where there is a future...Know what I mean, Verne?
Comments