New Geography

Tag: rural issues

  • An Open Letter To The Democratic National Committee From A Rural Democrat

    Dear Democratic National Committee,

    I’m writing you as a recently defeated Democratic State Senator in the “Red State” of North Dakota to talk about rural America. I’ve heard you may be interested in learning about us after the results of the 2016 election. Some of you have taken to the national airwaves to talk about reconnecting with our life styles here in the heartland. I’m glad it seems we finally have your attention.

    Here in the heartland of America, Democrats have been forced to fight against the odds you’ve unwittingly built against us to win elections. Unfortunately after the past couple of election cycles, there are only a handful of rural Democrats left who have been successful at overcoming those odds. One of them I’m proud to call my United States Senator.

    You should know that since the election, many of the North Dakota Democrats I visit with have done a lot of serious soul searching. “Where do we go from here?” “Has the national party shifted in such a way that I no longer identify with it?” “How do we reclaim what it means to be a Democrat in rural America?” All of those questions are complex and will take time to resolve. The answers may come differently for each of those individuals, especially for those who have felt abandoned out here. One thing I know for sure, none of them plan to quit and walk away from their drive to improve the community around them. It is the path to successfully have an impact that is the question.

    We’ve witnessed good, solid, moderate candidates get abandoned here in the Midwest; financial help stripped from promising campaigns and a separation in policy priorities between North Dakota and the coastal states. This only furthers the difficulty of finding great candidates who are willing to put their name on the ballot under your brand. Believe me; there are elected officials from the other side of the ticket whose priorities do not align with the average North Dakotan. Some of them have their eyes set on higher office. And as you know, Senator Heidi Heitkamp is up for reelection in 2018. We are willing to do all we can locally to get her reelected, but we need the assurance we aren’t going it alone.

    It is not just North Dakota Democrats either. A poll done by the Pew Research Center finds Democrats are less optimistic about their party’s future. This is a swift change from the pre-election talk of Trump being the death of the Republican Party as many of your pundits boasted. We also see how party leaders are trying to rationalize this year’s drumming. It was the FBI, it was fake news on Facebook, it was Jill Stein, and the list goes on. Bullshit. All of those likely had an impact, but I fear there is a more fundamental failing in the national Democratic Party.

    You’ve forgotten about who we are in rural America, and how many of us live our lives.

    I’m afraid you may have learned nothing from the November 8th election. While you talked about us in rural America, Congressional Democrats decided to stick with Rep. Nancy Pelosi as their leader over the other option, Rep. Tim Ryan from rural America. Staying the course with the same leadership that has overseen the decimation of the Democratic Party in the Midwest doesn’t bode well for us in the heartland.

    North Dakota Democrats have been in a precarious position for at least a decade. We are an energy-producing state with family and friends in the industry. Some of our towns are built for, and sustained by, energy workers. We understand how vital these resources are to our country while we build new technologies to diversify. We’re also proud farmers who take pride in caring for our land and feeding the world. We hunt, we fish, we own guns, and we have closets full of camouflage, blaze orange, and Carhartts. We’re the crowd at a small town street dance where live music is played on the back of a flatbed trailer. We are community driven individuals who know we all do better when we all do better.

    When you push an agenda where at the top you aim to hamper fossil fuels or add foolish rules on farmland, it boxes local Democrats in, here in North Dakota. It has become easy for the local political opposition to simply say, “Those Democrats are out-of-touch. They’re the party of Pelosi!” and they do it effectively. Here, we know how our homes are heated in the cold winter months, what fuels our trucks to drive down our gravel roads, and where our food comes from. That seems like a stark contrast from the rhetoric we hear from many national Democratic leaders who seemingly want to alter our way of life.

    So after laying that out, this is often where my more liberal friends ask if there is even a difference between a Republican and us rural, moderate Democrats. You’re damn right there is. To understand this, I welcome you to look at the North Dakota Legislature. Democrats pushed for sales tax exemptions on clothing for families. We reasoned for renters’ relief. We fought for family leave. We defended services for senior citizens, veterans, and people with disabilities. Meanwhile, what was passed by the Republican majority was an oil tax cut, a weakening of insurance for injured workers, corporate income tax cuts that go out-of-state, and threatening a reduction in services for senior citizens and children with disabilities. If people think there isn’t a difference between Democratic and Republican priorities in North Dakota, they haven’t been paying attention. It is on the Democratic Party to do a better job of telling that story and remind the average, hard working American that our values and priorities align with theirs.

    While you’ve been focused on the White House and maintaining Congressional seats, you’ve surrendered the fight for us in the heartland. We are now left clinging on to the hope that we can recapture the trust of our local electorate. We hear from the national Democratic Party about how important connecting with rural America is to them now. Here is the problem:

    You keep talking about us, but nobody is talking with us.

    The first step to understanding us is listening to us. The first step to winning is showing up. There is still time. If you’re interested, I know a lot of small town diners, bar counter tops, gas stations, and locally owned businesses that would welcome you if anyone were interested in engaging and talking with us here in the heartland.

    Tyler Axness
    Former North Dakota Democratic State Senator

    This piece first appeared at NDxPlains.com, a site discussiong ND and national politics.

  • Rural-Urban Rift on Healthcare Reform

    While much of the media coverage on the ongoing healthcare reform debate has focused on partisan division, a less mentioned point of conflict exists between rural and urban healthcare interests.

    Rural healthcare providers have long received lower Medicare reimbursement rates than their urban counterparts. Such geographic disparities are set by complex formulas that take into account (among other things) prevailing wage rates and assume higher costs of care provision in urban areas. Rural providers have argued that while wage rates may be lower in their communities, they face challenges in providing care not seen in urban environments, and are less able to take advantage of economies of scale potentially available in higher volume urban settings.

    Rural concern over reimbursement rates has now become a point of contention in the heated healhcare reform debate. At issue is a proposal to have the so-called ‘public option’ “pay health care providers at reimbursement rates used by Medicare”. Rep. Earl Pomeroy (D-North Dakota), a member of the House Ways and Means Committee, voted against what he stated was “a very urban bill.” Another Democrat, Ron Kind of Wisconsin’s 3rd District, also voted against the reform bill in committee, arguing that the proposed reimbursement rates were unfair, and that he didn’t “want to lock our providers into a system where they continue to be penalized”.

    Perhaps sensing a growing threat to their healthcare agenda, the Obama administration appears to be making conciliatory moves to placate rural Democrats. On Tuesday, House “Blue Dog” Democrats, representing the more conservative wing of the Democratic Caucus, met with President Obama to discuss their concerns. On the table were proposed changes to the legislation focused on “protecting rural areas and small businesses.”

    Upon leaving the White House, Rep. Mike Ross (D-Arkansas) expressed hope that the meeting had yielded progress towards creation of an “independent Medicare advisory council”. Such a council would, reports the Wall Street Journal, be empowered to “to make binding recommendations on how Medicare pays doctors and hospitals.” This would appear to be a concrete step towards addressing rural concerns over potential geographic disparities under the public option. However, it remains to be seen if the proposed changes will be acceptable with representatives from more urban districts.

  • Economic Resilience in Rural America?

    This week Reuters is hosting a Food and Agriculture Summit in Chicago. On Tuesday presenters, including leading agribusiness executives and business economists, reported that despite the challenging global economic climate, the U.S. rural economy has weathered the recession better than most sectors due to steady demand for agricultural products, stable land prices and healthy credit lines for farmers”.

    Jim Borel, a VP at DuPont Co stated that “fundamentally, food demand is there,” as “people need to eat,” which “helps to stabilize things.” According to Reuters such claims were echoed by other participants, including Mark Palmquist, CEO of CHS Inc, who noted that the world keeps “adding mouths to feed,” and that “food demand… tends to be pretty insensitive to what the global economy is doing.”

    While there appears to be some anticipation of stability at large agribusiness corporations, such optimism may be tempered among farmers, who have seen commodity prices drop by 50% or more over the past year. Such drops will create a more difficult business environment for producers. However, there is some hope that the strong prices received by farmers over the past couple of years will make them better able to, as one agricultural official in Wisconsin stated recently, “ride it out for somewhat longer than otherwise would have been the case”.

  • The Recession Hits the Plains

    On Monday, Creighton University’s Economic Forecasting Group released the latest installment of the Mid-America Economic Survey. The survey of supply managers in nine plains states has been conducted monthly since 1994 to “produce leading economic indicators of the Mid-America economy.” The survey provides a snapshot of economic activity in the states of Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

    For November, the economic picture was less than positive. The survey’s primary index hit a second straight all-time low in November, recording a score of 37.8. Any score below 50 “indicates a contracting economy over the next six to eight months.” Only one state surveyed, North Dakota, showed a growing economy, with an index reading of 55.7, down from both September and October.

    Employment prospects in the area were also negative, with the region showing “job losses for the tenth time in the past 11 months.” This led to a “very weak” November employment index figure of 39.0, down from 49.7 in October, another record low. Creighton economics professor Ernie Goss, a member of the forecast group, expects “regional job losses to mount in the months ahead with rapidly rising unemployment rates for most states.” According to Goss, the area is “now in a recession and I expect it to rival the recession of 1981-82 in terms of joblessness and job losses.”

    Echoing such findings today, the Federal Reserve released the latest edition of the Summary of Commentary on Current Economic Conditions, more commonly referred to as the Beige Book. According to the report, “overall economic activity weakened across all Federal Reserve Districts,” with declines in retail sales, manufacturing activity, and housing prices being reported in nearly all districts. On the plains, the Minneapolis and Kansas City Fed districts both reported weaker overall economic activity.

    Hopes for a quick rebound are subdued. According to the Kansas City Fed, their “business contacts expressed little optimism about economic activity going forward.” The Mid-America survey reports that economic optimism “captured by the confidence index, slipped to another record low of 22.4” in November. While pockets of strength such as North Dakota remain, communities across the plains now face the prospect of a significant economic downturn.

  • The Transmission Infrastructure Dilemma

    Last week, Bismarck, ND was host to the second annual Great Plains Energy Expo and Showcase. Hosted by Bismarck State College and Senator Byron Dorgan, the conference focused on North Dakota’s growing energy industry, including the wind energy sector, with presenters such as T. Boone Pickens discussing the opportunities and challenges facing the industry.

    Wind is a readily available resource on the plains of North Dakota, which have been referred to as the “Saudi Arabia of wind”. According to David Hadley of the Midwest ISO, a transmission coordination agency, North Dakota is the top state in the nation for wind energy potential. At 40% capacity, the state would have over 345,000 MW of potential generation capacity.

    Current generating capacity is a minuscule fraction of this potential output. However, North Dakota has seen a major increase in investment in wind energy projects over the past several years. In 2005, there was only 80 MW of wind generation in the state. As of June, 2008, that number stands at “716 MW either in service or under construction, plus another 807.5 MW that has either been site permitted or is in some stage of the siting process.” According to the Midwest ISO, potential North Dakota projects being discussed or currently under way add up to 7656 MW of potential generation. One major project under discussion would include 2000 MW of generation, costing around 4 billion dollars. The development is, in the words of one elected official interviewed by the Bismarck Tribune, “truly eye-popping.”

    Standing in the way of exploiting the Great Plains’ wind bonanza is a major challenge- transmission capacity. North Dakota currently has a transmission export limit of 1950 MW, which is fully subscribed by current power producers. While several upgrades to the system are in the works, they will fall far short of the massive build up in transmission infrastructure needed to allow for continued rapid expansion of generation capacity. As one presenter at the Great Plains Expo put it, the region is “a victim of [its] own location.”

    In August the New York Times discussed the challenge posed by transmission limitations, noting that “North Dakota and South Dakota, could in principle generate half the nation’s electricity from turbines. But the way the national grid is configured, half the country would have to move to the Dakotas in order to use the power.” If unaddressed, the inadequacy of the electric grid will serve as a check on energy driven economic development on the Great Plains. Rick Sergel, President of the North American Electricity Reliability Corp. (NERC), argues that “Without new transmission development needed to support these resources,” it is likely “only a fraction,” of currently proposed wind projects will be built. Speaking to Reuters, Sergel called for serious consideration of “comprehensive plans that cross state lines and international borders to build the clean-energy superhighway that will provide everyone equally with access to carbon-free generation”.

    It appears that expansion and modernization of transmission infrastructure will receive significant attention from the incoming administration. President-elect Obama stated in an interview on MSNBC that “the most important infrastructure projects that we need is a whole new electricity grid,” and that he wants such projects “to be able to get wind power from North Dakota to population centers, like Chicago.” With the current economic slowdown increasing calls for an economic stimulus package, investment in infrastructure, including grid expansion and modernization, appears set to take a central role in policy discussions in the coming year.

  • Down on the Farm

    2007 was a good year for rural America. Driven by “bumper crops, strong demand, and high prices” in commodity markets, farmers across the United States enjoyed an “exceptional year”. Strong conditions continued into the first half of 2008, spurring farmers to increase “purchases of capital equipment and household consumption,” and fueling “double-digit percentage gains in cropland values,” in many areas of the nation.

    Unfortunately for rural America, these boom times appear to be drawing to a close. Over the past few months, prices for wheat, soybeans, corn, and other commodities have come back to earth, while input costs have soared. According to the Fargo Forum, the USDA calculates that expenses faced by farmers “increased half as much in just the past year as they rose in the previous 15 years combined,” leaving farmers “hard-pressed to make money next year even if they enjoy good yields”. This has left many farmers concerned that farm country may be facing a repeat of the lean times faced during the farm crisis of the late 70’s and early 80’s. One long-time farmer, Harlan Meyer of Davenport, Iowa, expressed his reservations about the situation to the AP, stating that,

    “I guess you could say there’s an awful lot of concern in the rural communities and with some of the city people… I would think there would be a lot of cautiousness among farmers because most of the people can remember the ’80s and I would think there’s probably a lot of cautious people now on spending a lot of money.”

    While rural communities may be facing tougher economic times in the face of a bursting commodity bubble, it appears that their banks will be able to meet such challenges from a position of relative strength. According to Reuters, banks throughout rural America “are not freezing credit to customers like large money center banks, offering a bright spot in an otherwise gloomy economy”. Such banks have “largely steered clear of the subprime housing loans,” have “low to no exposure,” to credit derivative instruments, and are able to draw on a strong base of deposits to continue to provide loans. Those loans will also be made at far better terms than those seen during the farm crisis, with banks today offering farmers “interest rates that are one-third or one-half of what they were in the late 1970s.”

    While conditions may have some ways to go to match the bleak days of the farm crisis, some legislators are already expressing concern about access to credit in farm country. This week, Sen. John Thune of South Dakota called for a hearing to explore the impact of the credit crisis on rural America. While rural banks may be in relatively sound health, it appears that those same banks are, according to the AP, requiring “more collateral and higher interest rates,” for loans, and are, in the words of a Texas A&M economist, “turning conservative”. However, the AP also notes that even in the face of such tightening, lending will continue, as “the industry’s traditional lenders — independent commercial banks — are on more solid financial footing than the country’s largest investment banks and commercial banks”.

  • As Goes North Dakota…

    North Dakota is not a state known for supporting Democratic candidates in Presidential elections. In the the past 80 years, it has only backed the Democrat three times- Franklin D. Roosevelt in 1932 and 1936, and Lyndon B. Johnson in 1964.

    Notably, these three elections mark the three largest popular vote landslides by Democrats during that period of time. In 1932, FDR won nationally by a margin of 18%, in 1936 he won by 24%, and in 1964, LBJ defeated Barry Goldwater nationally by 22%. No other Democratic presidential candidate has run up a double digit margin during that period, with FDR coming closest in 1940, winning by 9.9%. (And, it should be noted, losing North Dakota.)

    This year, however, North Dakota may be in play. While President Bush won the state in 2004, 63% to 35% over John Kerry, the most recent polls of the state, by Research 2000 and the Fargo Forum, place the 2008 race in a dead heat.

    This may be a reflection of a wider trend in rural areas. A survey of rural voters in 13 battleground states released in late October by the Center for Rural Strategies, showed Sen. Obama and Sen. McCain tied among rural voters. In September, similar polling by the center had shown McCain with a 10 point lead among rural voters. According to Reuters, in 2004, President Bush “won rural districts nationwide by 19 points.”

    If the recent 2008 polling proves accurate, Tuesday night may be an unhappy evening for McCain supporters, with Sen. Obama facing the possibility of winning by a healthy margin, potentially bringing rural states such as North Dakota along for the ride.