In the next three years, “Louisiana will be the epicenter of the industrial rebirth in the U.S.” — or so claimed Stephen Moret, Gov. Bobby Jindal’s secretary of economic development, in a recent interview with The Lens. Moret used the same words in a letter published at other news sites. In fact, since late last year it’s become his favorite way to describe the state’s prospects.
Moret refers to manufacturing projects spawned by the energy revolution. Cheap natural gas unlocked by hydraulic fracturing has lowered operating costs for energy-intensive industries. Several huge new petro- and agro-chemical plants are in the works. Meanwhile, there’s a resurgence in deepwater oil drilling in the Gulf of Mexico.
So, boom times are ahead, and Louisiana will lead the way?
Well, it’s never simple here. The boom Moret forecasts may come, but pesky economic metrics are not yet cooperating. Last week, The Lens’ Tyler Bridges reported that state revenues under Gov. Bobby Jindal remain below their 2008 high point and are expected stay there through 2017. (Most other states are seeing a predictable revenue recovery now that the Great Recession is abating.)
Even more confounding: Louisiana’s unemployment rate has risen six months in a row.
These data points are interrelated to some degree. Low government revenues have led to public sector job cuts, and no doubt this has contributed to the rising jobless rate. Jindal might not be bothered by the low revenue numbers, since conservative economic theory holds that the private sector is a better steward of financial assets than are state bureaucrats.
The increasing jobless numbers, on the other hand, are likely causing perspiration in Baton Rouge.
Jindal’s poll numbers are already low. Louisianans are frustrated by cuts to health care and higher education — and offended by the governor’s rather naked ambition for national office. Despite these headwinds, Jindal has always been able to say that Louisiana’s unemployment rate is below the national and Southern averages, a talking point that may soon have to be edited out of his script.
Next week, when the Bureau of Labor Statistics releases state unemployment data for July, it’s distinctly possible that Louisiana’s rising (currently 7 percent) unemployment rate might equal or eclipse the Southern average (7.2 percent). That crossover would prompt a slew of unwelcome news stories and speculation. If so, look for Jindal’s approval rating to swoon to new lows.
And if a rising Louisiana unemployment rate exceeds the falling national rate (7.4 percent) … hoo boy. That becomes extraordinarily inconvenient, in political terms.
Moret would have to can his grand talk about an industrial renaissance on the bayou. Jindal would be in a pickle, too.
We know that disaster recovery dollars following Katrina and the oil spill helped blunt the impact of the Great Recession. Jindal was able to tout the state’s low jobless rate starting in 2006 when it dropped below the national average (on a sustained basis) for the first time in decades. Jindal acted as if this were evidence of tremendous economic leadership on his part, rather the effect of federal stimulus augmented by BP’s guilt money.
Now, as this artificial economic jolt wears off, the question becomes: Did we invest disaster recovery funds wisely? Are we on a new economic path, or is this rising unemployment a sign that Louisiana will revert to form as an economic backwater?
Moret would have us believe it’s a new day. Investments are in place, huge new plants are being built. The unemployment uptick is just statistical noise before the industrial boom kicks in. Don’t you worry, fracking good times lie ahead!
He has a point. In April I made a partial list of encouraging business news items about new headquarters, plants and facilities in Louisiana. It’s an impressive array of projects, and it would be highly disturbing if, as they came online, statewide employment numbers continued to worsen.
Keep watch to see if next week’s statewide unemployment numbers rise again. If they do, it could signal more political problems for the Jindal administration. The public would want to know what is happening to the Louisiana economy right now. They wouldn’t want to hear Moret’s repeated assurances about the industrial paradise that lies over the rainbow.