December 1, 2011

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Economic River Rafting

Utah Leaders Steering the State’s Economy

Natalie Gochnour

December 1, 2011

Now that the Joint Select Committee on Deficit Reduction, otherwise known as the Supercommittee, has failed to do its part, the U.S. spending problem is once again solidly in the hands of the U.S. Congress. Their economic leadership—or lack of leadership—will significantly impact regional economies all around the country, including ours. It is nail-biting time and we need our government to step up big. As some economists have said, the market economy sits in the back seat while government leaders (globally and domestically) sit in the front seat holding the wheel. We need serious economic leadership.

As Congress wrestles with the fiscal failures of our country, they would be wise to learn from Utah state government leaders who, time and time again, put the economy and people of Utah first by managing state finances wisely. Governors and legislators in Utah have a long track record of prudently managing the state budget. Their actions have created an environment for free enterprise to succeed, and it’s a model worth emulating.

While the national economy continues to stop and start, sometimes sputtering to a crawl, Utah’s economic success is beginning to feel real. The Utah economy is growing at more than twice the national average. We rank in the top three states in the country for job growth, which at 2.6 percent is within reach of our long term average of 3.2 percent. It’s been a long slog, and it’s great to see Utah leaning into the wave.

I’m fond of a river rafting metaphor that captures the difference between the U.S. and Utah economies. We are both navigating serious whitewater in the form of a housing correction, international strife, tight credit, weak consumer confidence and suffocating debt. Without strong oars and a boat captain who knows how to direct the rowers, the raft drifts aimlessly along, tossed and tipped by the economic waves, hitting eddies and holes, never quite mastering the current and putting all the people on the raft at economic risk.

Therein resides the difference between Utah and the nation. In the nation we have a river raft without a clear captain (is the president, is it Congress, is it the Tea Party?). The people on the boat have no paddles, have a broken paddles, or have paddles the size of a spoon. The paddles of interest rate reductions, quantitative easing and stimulus are long gone. We have little left to give.

In contrast, Utah has a boat captain in the form of Gov. Herbert who has laid out a clear economic vision that recognizes the central role of the market in allocating resources efficiently. His point people, Spencer Eccles and Jeff Edwards, are sitting at his side paddling with big oars and reaping great results—Adobe, Goldman Sachs, ITT Corporation, eBay, to name a few.

Utah legislators are sitting at the front of the boat and paddling in sync. Their oars are powerful fiscal tools—a balanced budget, a healthy rainy day fund, a statutory spending limitation, a constitutional limit on bonding and a stellar AAA bond rating, the best available. The Beehive State avoids turning sideways in the biggest water because we are guiding the raft, following the “V” as river rats like to say.

In Utah, we have control of our boat. In the nation, we have drift. There is a huge difference.

Next time you see a Utah legislator, tell him or her thanks. They have ably managed Utah’s economic raft in rough waters and helped us to prosper once again. Next time you see Gov. Herbert, tell him you appreciate him making the Utah economy his top priority. It shows. And next time you see a candidate for elected office or a representative in federal office, tell her or him to learn from the Utah state government model. Economic leadership works and we could all use a lot more of it.

It’s time to stop taking on water and to start enjoying the ride.

Natalie Gochnour is the chief economist at the Salt Lake Chamber. She served as a state economist for 18 years, working for three Utah governors, and was a political appointee in the Bush Administration. You can follow her on Twitter at @Gochnour.

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