Booming North Dakota City Shows Wisdom of Markets
This is a tale of two cities. No, not Dickens’ phlegmatic London and passionate Paris. Nor the two neighborhoods Charles Murray contrasted in his recent bestseller “Coming Apart” — prosperous but isolated Belmont (actually, Mitt Romney’s home for decades) and needy and disorganized Fishtown.
These two cities have names you may not recognize but which you have probably read about in the last few years: Fremont and Williston.
Fremont, Calif., is the southernmost city in California’s East Bay, just around the corner from (well, a few freeway exits away from) Silicon Valley.
It’s not as upscale as Palo Alto or Cupertino but has its own distinctions. It was the site of the NUMMI plant where General Motors and Toyota collaborated for years but which closed in April 2010. It’s the site of the California School for the Deaf.
It has a large minority population, about half Asian in 2010, with many Filipinos, Chinese and Indians, and a smaller number of Hispanics. Politically, it’s Democratic territory: Fremont voted 71 to 27 percent for Barack Obama over John McCain.
Near to glamorous Silicon Valley, with lower rents, it seemed the ideal place for what the Obama Democrats were convinced would be the green energy business of the future, the manufacture of solar panels. Just the place for green jobs!
So Fremont is the site of the gleaming headquarters of Solyndra, the solar panel firm promoted by an Obama megacontributor, which got a $535 million loan guarantee from Obama’s stimulus package.
But the wave of the future turned out to be a stagnant puddle. Solyndra went bankrupt. Meanwhile, Fremont, like most of coastal California, has had continual outmigration to other states and has grown only due to immigrants. It grew only 6 percent between 2000 and 2011.
If the Obama folks back in 2009 thought Fremont was the harbinger of America’s future, one wonders what thoughts they had, if any, about Williston, N.D.
Probably none at all. North Dakota was for many years the state least visited by people from other states, an orderly rural state with about the same population as in 1930. There’s no voter registration because everyone would know if a stranger came in to vote.
On the Missouri River bordering Montana, Williston and surrounding Williams County were quiet farming territory. The county’s population reached 19,000 in 1930, then slumped and fell, and only topped 19,000 again in 2000.
Williams County was the home of Henry Bakken, the farmer after whom the Bakken shale formation was named when it was discovered in 1953. For years, geologists knew there was a lot of oil packed into the shale rock, but it was not economic to get it out.
That changed late in the last decade. Oil companies developed hydraulic fracturing techniques — fracking — that made the Bakken oil commercially valuable. Drilling has been booming, and Williston is the nation’s fastest-growing small city — so fast that it doesn’t have enough housing for the workers pouring in. Williams County grew 23 percent between 2000 and 2011.
This spring, North Dakota became the No. 2 oil-producing state, with lots of natural gas production, as well. It has the nation’s lowest unemployment rate.
Williston is a lot less glamorous place than Fremont and less ethnically diverse. In the 2010 Census, 91 percent of people in Williams County described themselves as white and 4 percent as Native American. Politically it voted 67 to 31 percent for John McCain over Barack Obama in 2008.
This tale of two cities has a moral, which is that no political or governmental leader can forecast the future. Barack Obama and his Nobel-Prize-winning energy secretary thought solar panels were a huge growth industry. They bet billions of tax dollars and lost.
True, many private investors guessed no better. But they were risking their own money, not ours. And, yes, government research provided some early help in developing fracking.
But Fremont and Williston are more evidence, if any is needed, that the collective decisions of participants in economic markets do a better job of allocating resources than the often contributor-driven decisions of a few politicians.
Williston’s jam-packed motels and trailers don’t look as glamorous as the Solyndra headquarters in Fremont. The weather in North Dakota is seldom as pleasant as the microclimate of the East Bay.
But the Bakken shale is doing much more for America’s economy than the shuttered solar panel plant.
Michael Barone, senior political analyst for The Washington Examiner (www.washingtonexaminer.com), is a resident fellow at the American Enterprise Institute, a Fox News Channel contributor and a co-author of The Almanac of American Politics.:
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