What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz
I posted my list of 2012's top 10 economic stories in the Upper Midwest earlier today.
Richard Longworth, a former foreign correspondent at the Chicago Tribune who now writes and speaks for the Chicago Council on Global Affairs, disagreed with a lot of it.
Mostly he accuses my list of parochialism and draws different lines to define the Upper Midwest. The region spans from the western border of Minnesota to just east of Pittsburgh, he said. But the region I pay attention to includes the Dakotas and excludes Indiana, Ohio and Pennsylvania. I'm sure he's probably right.
He's a smart guy and has a lot of good points. He said I could post his email:
Some thoughts on your list:
1. The North Dakota oil story belongs, but only as a part of the bigger energy and energy independence story, which includes the Keystone XL pipeline and (sorry, but other parts of the Midwest aren't totally irrelevant) the shale oil boom in other Midwestern states.
2. The labor battles? For sure. Great story.
3. Immigration is a terrific continuing story but the real story is the fact that the Midwest needs as many immigrants as it can get, at all educational and social levels, and the presidential election could go a long way toward solving this problem, by persuading the GOP that they're going to stay in the game only if they support some comprehensive sort of immigration law reform. All other aspects of immigration, including the educational part (admittedly, no small deal) depend on progress toward overall reform. So the election is the big story here.
4. That farm price story is good, but iffy. Maybe prices have peaked, maybe they haven't. The real story comes when the bubble bursts. So I'd say this might be a great 2013 story. The 2012 story is that prices kept going up.
5. Hooray for that Minneapolis Fed chief, but what about Charlie Evans, the Chicago Fed chief, who has been campaigning steadily and publicly for more simulus of some sort for at least two years now and seems to have won? Charlie's point is that the Fed has two goals -- monetary stability and full employment -- and had stressed the former at the cost of the latter. Time to get unemployment down, he said. He played a major role in that recent Fed announcement that rates won't go up again until unemployment hits 6.5 %.
6. The housing market? That's a bigger story nationally than in the Midwest.
7. I'm sure that news about Minnesota's biggest compaies really hit the headlines in Minnesota and would have had a major impact down here if we'd ever heard about them. This is too parochial. If you're going to make Minnesota companies #7, then major companies in, say, Iowa, Wisconsin and South Dakota have to be #8, #9 and #10. End of list.
8. Again, the skills gap and possible resurgence of manufacturing is a terrific story, perhaps the best of the year. But it's a national story and, more truly, a story affecting the broader Midwest, where manufacturing and heavy industry are more important and their fate, hence, has more impact. This embraces southern Wisconsin and eastern Iowa but not much of the rest of your Upper Midwest.
9. Again, the drought and the Mississippi are huge stories and should be lumped together. The drought sent the region's crop prices and land prices through the roof. The Mississippi crisis could cut the upper Midwest off from many of its markets. This could be a one-year phenomenon but, if it's not, if it's truly the harbinger of global warming, it means 2012 was a big watershed (sorry) year for the Midwest.
10. Forest products is a good story, partially in itself and partially as a a sign that Midwestern newspapers, which have been trying to figure out what their obligations and readership are in this new media market, may have found an answer.
11. Taconite. Too parochial. Like that Minneapolis Fed chief.
12. Bad holiday shopping? A one-day story. it may mean something, or may not.
15. Chicago housing market? Again, too parochial. What's going on in Chicago is interesting but the housing maket is a pretty small part of it (see below.).
16. The Midwest's water tech sector. I would have put this in the top 10, but would have broadened it way beyond Minneapolis, which is a pretty puny player so far. Milwaukee is the true center, with its Water Council, the new Freshwater School at the U of Wisconsin at Milwaukee, etc. Chicago is getting in the game, with its BlueTech alliance and with Rahm Emanuel's ambition to make Chicago the water capital of the world. That new alliance between Indiana, Illinois and Wisconsin is focusing on water solutions as a common industry. The year 2012 was the year hat the Midwest woke up to the fact that, in a drying world, it's sitting on the biggest single resource of fresh water on the planet. Big story.
In Chicago, it's only partly housing. Mostly, it's the arrival of the post-Daley era, with the realization that the sainted Richie left us with a pretty dire financial situation. Emanuel is focusing on regional economic development, IT investment, more cooperation with universities, etc. These are the goals. What's happening is the birth of a real IT sector (most of Obama's tech whizzes, who won the election for him, came out of this sector), and the signs that Chicago is finally developing a venture capital core.
In a year of continued gloom, some Midwestern cities are doing surprisingly well, and have been getting attention. Des Moines and Omaha in partiular. Unemployment is down, investment is up, IT is booming.
Finally, we all like a good crime story and the Midwest came up with its own home-grown Bernie Madoff. Russ Wassendorf and the Peregrine scandal had everything, including lots of money, a high-living protagonist, an attempted suicide, a Las Vegas wedding and a truly tragic impact on a Midwestern small town. If good yarns count, this one belongs on your list.