You may have read my top-of-the-morning post yesterday on South Dakota's anemic GDP growth for 2012, a meager 0.2% uptick for the year. Then you may have read the state economic development honcho Pat Costello's announcement that South Dakota's GDP rose 1.9% in 2012. What gives?
Governor Daugaard's minion is citing nominal GDP data, which is included in the Bureau of Economic Analysis data on which I base my report. Nominal means the raw dollar figure. And yes, if you look at that statistic, you see that South Dakota's raw GDP did indeed increase from $41.7 billion in 2011 to $42.5 billion in 2012. That's 1.9%.
But my statement that South Dakota's GDP grew only 0.2% isn't wrong... and most economists would agree with me:
The discrepancy is calculation-based. The governor’s office is using “nominal” dollars, which is money that actually is in the economy. Federal agencies such as the Bureau of Economic Analysis use “real” dollars, which adjusts for inflation. [SDSU ag economist Evert] Van der Sluis said most economists prefer the real GDP statistics [Megan Card, "Drought Blamed for Sag in Farm Sector Causing Drag on State's GDP," that Sioux Falls paper, 2013.06.11].
The numbers at the top of the BEA report are chained 2005 dollars. They measure what you can actually do with the dollars in the economy. And we all know that $42.5 billion in 2012 couldn't do as much as $42.5 billion in 2005.
Even if we set aside our real-vs. nominal sturm und drang, we still find the ag sag dragging South Dakota down. Costello's preferred numbers show U.S. nominal GDP growing 4.05% in 2012. We beat Wyoming, Alaska, New Mexico, and Connecticut, and that's it. And those commies in Minnesota beat us with 5.27% growth.
Another way to put GDP in perspective is to talk about real GDP per capita, how much wealth each person in the state would have enjoyed if the fruits of the economy were distributed equally. South Dakota's real per capita GDP dropped 0.87%, from $43,561 in 2011 to $43,181 in 2012. That keeps us at 21st in the nation. The U.S. real GDP per capita rose 1.70% to $42,784, still not quite recovered from the 2008 recession. So we're beating the national average, but not Minnesota, which ranks 13th with real GDP per capita of $47,028, up 2.89% in 2012.
Pierre likes to pick the numbers that tell its preferred story. I'm happy to keep supplying the rest of the story.
Picking "facts" that really aren't facts is a real problem for the GOP. Let's call it what it really is: lying.
Donald, here I am trying to be polite, and you have to go and tell it like it is... again. :-)