Today the Philadelphia Fed released coincident indices (measures of aggregate economic activity) for the states and the US. Wisconsin outperforms Kansas — a very low bar — and yet has lagged all her neighbors.
Consider first Wisconsin compared to Kansas (like Wisconsin an ALEC darling) and Minnesota and California (not ALEC darlings).
Figure 1: Log coincident indices for Minnesota (blue), Wisconsin (bold red), Kansas (green), California (teal) and US (black), all normalized to 2011M01, seasonally adjusted. Source: Philadelphia Fed, and author’s calculations.
Only the disastrous trajectory of Kansas’s economy makes Wisconsin’s performance look tolerable.
Some observers have argued that the dissimilarities between these states invalidates the preceding comparison. However, the comparison with Wisconsin’s neighbors does not cast Wisconsin economic performance in a noticeably better light.
Figure 2: Log coincident indices for states adjoining Wisconsin — Minnesota (blue), Wisconsin (bold red), Illinois (teal), Iowa (green), Michigan (purple), and US (black), all normalized to 2011M01=0, seasonally adjusted. Source: Philadelphia Fed, and author’s calculations.
It is interesting to observe that — despite the ample scorn heaped upon Illinois by conservative commentators (including in the comments section of this weblog) — Illinois has outperformed Wisconsin for essentially all of the past three and a half years. And, as I mentioned, Wisconsin lags the (regional) pack.
(Note that regardless of whether one normalizes to the previous trough or peak, Minnesota outperforms Wisconsin.)
Update, 12:40PM Pacific, 8/21: Gross State Product figures released yesterday, extending up to 2013Q4 (i.e., to the end of last year) confirm the relative poor performance of Kansas and Wisconsin.
Figure 3: Log Gross State Product for Minnesota (blue), Wisconsin (bold red), Kansas (green), California (teal) and US (black), all normalized to 2011Q1, seasonally adjusted at annual rates, in Chained 2009$. Source: BEA (August 20, 2014), and author’s calculations.
As of 2013Q4, cumulative growth since 2011Q1 was 2.4% higher in Minnesota than that in Wisconsin; for the Nation as a whole, it was 2.1% higher than that in Wisconsin.