South Dakota Should Look to "Irish Miracle"

February 22, 2011 - Sioux Falls Argus Leader, by Marty Gallanter

The annual “great debate” in South Dakota is under way; how to balance the state budget in a time of very limited resources?  Everyone has an opinion or an idea but no seems to be offering any plan for a truly long-range solution.

About to decades ago, Ireland made some tough, expensive and innovative decisions about the future.  The results came to be known as the “Irish Miracle.”  This small nation, famous for grinding poverty and the mass exodus of its young people chose to develop an educated and highly skilled work force. They made advanced education, both academic and technical, available to virtually everyone.

It was not a universally accepted idea.  Some said that the Irish taxpayer would be financing the training of young people who would then take their skills to New York , Boston , London and other places far from Irish soil.  But the government persisted despite the critics.

At the same time, they restructured the Irish tax code to make it more business friendly.  Bit by bit, with each graduating class, they made progress.  About ten years ago, they reached a tipping point. Corporations soon were flocking to Ireland to take advantage of the skilled labor pool.  So many good jobs came that Irish immigration started to flow in the other direction.  Irish people living abroad began to come home to work.  The desperate poverty that was the background of the best-selling novel Angela’s Ashes became the Irish Miracle.  For a while Ireland was the most prosperous nation in the European Union. 

Unfortunately, the economic turn-about came to a grinding halt when the Irish banking system collapsed.  The deregulation of the financial industry had gone too far.  Like America , Ireland ’s banks had to be bailed out and economic growth came to a halt.

But that particular failure did not mean they had tried to implement a bad idea.  Validation is found across the Mediterranean Sea in Israel .  This tiny country absorbed a million Jewish immigrants from the former Soviet Union .  Most were already highly skilled including scientists, engineers, musicians, doctors, nurses and teachers.  Higher education in Israel had been free or nearly free for decades giving this nation of about five million one of the most skilled work forces in the world.  The Russian immigration just added fuel to an already burning fire.

At first unemployment was high, but soon the brain power of the nation began to attract international corporations like Microsoft and Intel.  Start-up high-tech operations grew faster than weeds in a garden.  All this was happening within a tax structure that can only be called oppressive; a health care industry that was already socialized and a bureaucracy that was nothing short of mind-numbing.  Despite all of these anti-business, “job killing” factors, Israel prospered.  Although the world-wide recession put a major dent in the Israeli economy, its growth continues to this day fueled by the brain power of what is probably the most skilled work-force in the world.

What’s all this got to do with South Dakota ?  We already have a truly business friendly tax environment, a first-rate health care industry and a banking system that is second to none.   South Dakota is also blessed with a great state university system, first-rate technical schools and several top private colleges.  But visit their classrooms and you will see too many empty seats.  Check the budgets and you will find too much retreat and cutback.

We have the capacity to create a skilled work force that would be envy of the entire nation.  We have open space, low taxes, great real estate developers, affordable homes and banks willing to loan; everything we need to create our own “South Dakota Miracle” except the will and the resources to move ahead.

If we started today, planting the seeds, the positive results would not be seen while this governor is still in office.  Everyone in the State Legislature would be term-limited out before the harvest came through.  Maybe that’s why we can’t do it.  It just takes too long.

But maybe this governor can appoint a non-partisan commission to develop a plan and a path to our own South Dakota Miracle.  Wouldn’t that be better than additional casinos or an extra dollar on a twelve-pack of beer?  Maybe this year a long-range solution to South Dakota ’s economic issues can be part of that annual budget debate.

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