Tuesday, March 11, 2014
Gov. Paul LePage's reelection campaign -- and more recently his administration -- are touting a monthly report by the Philadelphia branch of the Federal Reserve showing that Maine is one of 11 states with a "booming" economy.
Said LePage via press statement, "When we took office, Maine’s economy was a mess, workers were losing their jobs in droves, and our state budget was a nightmare after years of liberals who advocated for tax increases, out-of-control government spending and the use of one-time money from the federal government."
The Reserve graphic would seem to make a compelling case. There's Maine awash in dark green (like dolla-dolla bills, y'all!). But before we bust out the $10,000, 15 liter bottle of Armand de Brignac Nebuchadnezzar Champagne, a la David Ortiz, a word of caution.
The three-month index by the fed reserve is far from perfect and economists traditionally caution against drawing any big conclusions from the report. One reason is because the index relies heavily on states' monthly employment reports, which are often revised (Remember the Pew study that claimed Maine was one of three states to lose jobs between 2012 and 2013?). And, those government job reports are based on a survey of approximately 3 percent of the state's employers.
That may explain why even some of LePage's supporters -- check out the comments on his Facebook page -- were skeptical of this report of a "booming" Maine economy.
Also, check out the Fed's historical reports. Maine's economy was supposedly booming in May and April, but it was contracting in January. In 2012 it was supposedly contracting five different times, while moderately growing six other times. In 2010, when LePage was running against the "failed" economic policies of Democratic Gov. John Baldacci, Maine's economy was "booming" on four different occasions, including the last three months leading up to LePage's gubernatorial victory. It was contracting two other times in 2010.
To see how other states are playing up -- or down -- the Fed report, check out Wisconsin where Republican Gov. Scott Walker is being attacked by Democrats for a supposedly contracting economy. Walker, by the way, is currently being discussed as a potential presidential candidate in 2016. Also, a reader pointed out that the Fed in September asked Walker to stop using the index to compare Wisconsin to other states, saying it was misleading to do so. Walker continued to do it anyway, until this month, when the index showed that Wisconsin was "contracting."
Steve Mistler covers politics and government for the Portland Press Herald. He spends a lot of time in the hallways of the State House.