Warren Buffett (left), better known as the Oracle of Omaha, earned $40 million last year and paid $7 million of it in taxes. But in his editorial in the New York Times on Sunday, he claimed that he doesn’t think he’s paying enough, and neither are his friends. So he’s asking the SuperCommittee to stop “coddling” him and his friends, and raise their taxes as part of the deficit reduction scheme they are hatching.
Finally, some good news about the economy, from an unlikely place: North Dakota. CNNMoney reported
that while the US’s economy grew at less than 3 percent last year, North Dakota’s grew by more than 7 percent. And with national unemployment over 9 percent, in North Dakota it is just over 3 percent (and hasn’t touched 5 percent there in more than 20 years).
http://www.bls.gov/web/laus/laumstrk.htm just over 3 percent
The prime driver is the discovery of vast untapped but recoverable oil reserves in the Bakken Formation, along with improved technology which is allowing entrepreneurs to obtain access to it: fracing (or fracking). Luke Popovich, a spokesman for the National Mining Association, explains that “North Dakota has a lot of untapped shale oil, and developing that field [has] attracted a lot of investment and a lot of employment into the state.”
The Bakken Formation is an oil shale deposit located two miles below ground, and reaches from western North Dakota into eastern Montana and up into Saskatchewan, Canada. It could be the largest domestic oil discovery in 40 years
http://money.cnn.com/2011/03/04/news/economy/oil_shale_bakken/index.htm the largest domestic oil discovery in 40 years
and, according to the U.S. Geological Survey, “is larger than all other current USGS oil assessments of the lower 48 states and is the largest continuous oil accumulation ever assessed by the USGS.” The original estimate for the field was 151 million barrels of oil when the USGS first looked at it back in 1995. But it revised its estimates upwards in 2008, by a factor of 25,
http://www.usgs.gov/newsroom/article.asp?ID=1911 by a factor of 25
to between 3 billion and 4.3 billion barrels, and even that may turn out to be conservative. Another study by the USGS starts in October which could possibly restate estimates to 100 billion barrels or more.
http://en.wikipedia.org/wiki/North_Dakota#Energy may turn out to be conservative
Production from that formation grew from 3,000 barrels a day in 2005 to 225,000 in 2010, with a million barrels a day possible in the next few years, according to Harold Hamm, president of Continental Resources. “This is a giant field,” said Hamm, who owns more oil and gas than any other American.
http://money.cnn.com/2011/03/04/news/economy/oil_shale_bakken/index.htm who owns more oil
In fact, there is potentially so much oil underground at Bakken that it could change the whole equation for pricing worldwide. Guy Caruso, the former head of U.S. Energy Information Administration (EIA), said, “If we get 2 million barrels a day, that could have a major impact on world oil prices.” At present the United States produces just under 10 million barrels of oil a day, and uses more than 19 million every day, so the addition of this additional supply would change the dynamic dramatically.
It’s already changing the economic dynamics for North Dakota. The oil workforce has grown from 5,000 workers in 2005 to over 18,000 in five years. And businesses and industries supplying services to that industry now employ more than 30,000 people. Estimates are that if production rises to a million barrels a day, there will be 100,000 employed in the industry.
At present there are 15,000 job openings and the state is sponsoring trade fairs in other states to try to find people to fill them. North Dakota has another problem as well: what to do with the state surpluses. The pension obligations are being funded
http://www.pewcenteronthestates.org/uploadedFiles/Pew_pensions_retiree_benefits.pdf are being funded
and $500 million has already been returned to state taxpayers
http://www.sidneyherald.com/articles/2011/07/16/news/doc4e222eda15bb8825819404.txt already been returned
with more refunds being considered.
http://www.taxfoundation.org/blog/show/27094.html being considered
Fifteen thousand people have moved to Fargo in the last ten years, pushing its population to more than 100,000 for the first time. And the state’s economic success is pushing per capita income upwards as well: it was 38th in the country in 2000, and is now 17th.
For those who have trouble digesting numbers like these, graphs of the explosive growth in crude oil production here
and jobs and economic activity here
should confirm what’s happening in North Dakota. The Tax Foundation’s facts on what’s happening there also show its robust economic activity. Tax Freedom Day arrives earlier in North Dakota, its state and local tax burdens are below the national average, and it boasts a favorable business tax climate.
http://www.taxfoundation.org/research/topic/48.html robust economic activity
And the records continue to fall. North Dakota’s monthly oil production set a new record in June of 11,540,000 barrels, up 22 percent from the previous year, and triple what it was just five years ago. Overall state employment, not just in the oil fields, just reached an all-time high, and its economic activity index is 12 percent higher than in early 2008, the start of the Great Recession (for the rest of the country).
The happy intersection of untapped resources, improved technology to reach them, and a favorable tax and government regulation climate, are enough to encourage entrepreneurs like Harold Hamm to develop these new oil resources. As noted by economics professor Mark Perry,
http://mjperry.blogspot.com/2011/08/more-records-for-north-dakotas-oil.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+blogspot%2FmmMP+%28CARPE+DIEM%29 Mark Perry
North Dakota’s impressive economic success clearly illustrates some of the benefits of domestic energy production: ongoing job growth, a jobless rate close to 3%, record-setting economic growth, and a bubble-resistant housing market.
There’s no reason that the economic success of North Dakota can’t be duplicated elsewhere, if we would only open up more U.S. land and off-shore areas to domestic energy exploration and drilling.
Finally, some good news about the economy, from an unlikely place: North Dakota. CNNMoney reported that while the United States' economy grew at less than 3 percent last year, North Dakota’s grew by more than 7 percent. And with national unemployment over 9 percent, in North Dakota it is just over 3 percent (and hasn’t touched 5 percent there in more than 20 years).
An analysis just released by the Federal Reserve Bank of San Francisco concludes that most of what Americans spend on consumer goods, electronics, clothing, sneakers and the like, stays in America. Surprisingly little comes from China after all. Say the authors:
The latest report from the Board of Governors of the Federal Reserve System confirms what every sentient being already knows: The economy is in the dumper, with little improvement expected. The report used words like “considerably slower,” “deterioration,” “flattened out,” “weak,” and “depressed” to describe current conditions, and it even noted that excuses such as bad weather and the earthquake in Japan “appear[ed] to account for only some of the current weakness in economic activity.” (Emphasis added.)
The stock market is in freefall once again, evoking specters of 2008. As one fund manager told the Wall Street Journal on Monday, “the sense of déjà vu is almost sickening.” The storied Dow lost more than 600 points Monday following huge declines late last week, appeared to get its footing yesterday, then plunged more than 500 points today. All over the world, markets are taking stock, so to speak, of the burgeoning debt crisis in the United States and Europe, and fearing the worst.