Montana Politics

Does Roy Brown Understand How Percentages Work?

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It’s been awhile since I have taken a math course or counted capital gains from an oil deal, but I think I might just understand math better than Roy Brown. In a story about Governor Schweitzer’s latest ad that claims Montana is one of the fastest growing economies in the nation, the Brown campaign offered this impressive response:

Brown’s campaign countered with a June 2008 Bureau of Economic Analysis report that said Montana real GDP ranked 47th nationally in 2007. It’s important to look at the size of Montana’s GDP, not just the growth, the campaign said. With Montana’s low overall GDP, the state tends to have a strong percentage increase in GDP, even as its actual economic growth often lags behind other states, Brown’s campaign said.

I’ve read this a number of times, trying to figure out what Brown is complaining about. It seems like, in his desperate strategy to criticize Montana at every turn, he managed to confuse himself just a bit. Economic growth is measured as a percentage change, not actual dollars. Yes, Montana does have a low overall real GDP—it might have something to do with being a sparsely populated state.

The Montana economy is doing very well, bucking national trends. Sure, our Real GDP is, and always will be one of the lowest in the country—and we certainly can’t expect Governor Schweitzer to have reversed 16 years of disastrous Republican rule in one term, but to suggest that growth isn’t a valid measure of the economy’s success, is absurd.

You don’t take my word for it. What does Entrepeneur Magazine say about Montana? It says Roy Brown is wrong:

Wheat selling at greater than $8/bushel turbocharged the crops sector of Montana agriculture during late 2007. Montana’s economic base is now firing on almost all cylinders, and the state is completing a record-breaking streak of four straight years of greater than 4 percent real growth. Looking to the future, annual growth of 4 percent is likely to continue into 2008 and maybe even beyond.

The state’s strong economic performance is attributable to buoyant conditions in most basic industries.

In my book, an economy “firing on almost all cylinders” is something to celebrate, not something to criticize with misleading figures. If we want to keep Montana’s economy rolling, I say we stick with someone who understands basic economics, and who has positive message for Montana’s future.

Gloomy Roy, who sees a cloud around every silver lining, just isn’t the answer.

About the author

Don Pogreba

Don Pogreba is a seventeen-year teacher of English, former debate coach, and loyal, if often sad, fan of the San Diego Padres and Portland Timbers. He spends far too many hours of his life working at school and on his small business, Big Sky Debate.

His work has appeared in Politico and Rewire.

In the past few years, travel has become a priority, whether it's a road trip to some little town in Montana or a museum of culture in Ísafjörður, Iceland.

4 Comments

  • Economic growth (Macro, as discussed here) has a variety of values for which it is measured; it is not a simple aggregated calculation of percentage increase. Further, GDP’s correlation with a “sparsely populated state” would likely align with Montana’s size relative to other states. Montana’s GDP ranks 47th relative to other U.S. States, Montana’s population ranks 44th relative to other U.S. states (U.S. Bureau of the Census): clearly there is a lag in Montana’s economic output (GDP) that indicates our economy isn’t producing at an optimal level (READ: MONTANA’S ECONOMY IS WORSE THAN COMPARABLE STATES). Finally, the last time I checked Entrepreneur (Not Entrepeneur) Magazine’s economic analysis isn’t highly regarded among those who understand Macro. The magazine’s assessment of higher wheat prices contributing to our economic growth is a result of the commodities boom, not Brian’s economic policy. Given a proper background in economic theory and training, it’s vividly apparent that Montana is not “doing very well, bucking national trends.”

  • I’m terribly confused. It must be because I lack your Ivy League economics background.

    Is Roy Brown correct, that Montana’s small size leads to higher percentages of growth? Do small states never, then, see a decline in growth rates?

    Perhaps my source is a poor one. Can you provide a source that shows Montana is not experiencing strong economic growth and job creation? Probably not, unless you find an article from 1998.

    In the meantime, read the Entrepreneur story a bit more closely. The article linked says that Montana is experiencing “buoyant conditions in most basic industries,” not just agriculture. Does that seem similar or dissimilar from the national economy?

    You can make the argument that state policy doesn’t have a huge influence on economic conditions. Republicans seem to do that whenever Democratic leaders experience boom times. Senator Brown can’t have it both ways, though. He’d like to be able to simultaneously claim that Governor Schweitzer hasn’t improved the economic conditions in Montana, but that he can.

    That’s absurd.

  • Three points:

    First, your belittling of my academic background, an education that furthers the development and progression of society, is laughable given your prior posting’s “superiority” regarding education. I find it beneficial to heed advice from those with a specialty and I’m flattered you feel threatened enough to insult my work.

    Second, you completely avoided the entire purpose of my response, that being Montana’s GDP relative to comparable states. Yes, Montana’s GDP grew this past year, and the year before, and the year before….(economies grow nearly every year). It isn’t positive growth economist are concerned with, it’s a benchmark relative to similar economies (positive growth rates). Our current benchmark is the GDP of states with comparable population bases; a benchmark we are severely lagging. Once again, simply citing a positive GDP isn’t suitable to praise an economy, outperforming similar/comparable economies is an appropriate analysis for successful economic development.

    Third (I can’t believe I actually am addressing this again), Entrepreneur Magazine could say the sky is green, grey or white; however, without proper research and referencing they lack an element of credibility.

    Bashing a candidate’s assessment of our economy because of your political outlook is biased and unethical. Good luck with the rest of your blogs.

  • Jesus, man. Why would I believe that you are an Ivy League economist? Surely, in your educational pursuits, you encountered the idea of ethos. What credibility does an anonymous post have?

    Look at the statistics. Montana has lagged near the bottom of states (below our population level) for decades. Surely, you don’t expect the current administration to vault us ahead of those trends–especially in a slow national economy.

    You might also look at the states who outperform their population. Do you think there might be reasons for that? It’s not too hard to figure out, really.

    All of the evidence is quite clear. Montana’s economy is growing faster than that of most states. You can bash my source all you like, but I note that you don’t provide any counter-information to bolster your claims.

    You say, “outperforming similar/comparable economies is an appropriate analysis for successful economic development.” I say that’s exactly what Montana has done under Governor Schweitzer. You can’t disprove that, you can only obfuscate.

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