The bankruptcy of Lehman Brothers was the climax of the subprime mortgage crisis. When attempts to negotiate financing for reorganization failed, Lehman Brothers filed for bankruptcy involving more than $600 billion. On this date in 2008, the Dow Jones fell by more than 500 points, a drop of 4½ percent. Other financial institutions began to feel the uncertainty, and the result was a financial panic that spread across the globe.
Rural states tended to fare somewhat better than metropolitan areas, at least in the beginning. But as the recession of 2008 threatened to bleed over into 2009, rural communities learned they were not immune to financial pressure. Economic activity slowed as the recession deepened and consumer demand continued to decline. But one state garnered national attention for its seeming immunity to the financial crisis.
Dozens of rural states were beginning to fail financially. They began raising fees and firing public employees. They closed tourist attractions and public parks. They canceled holiday displays, parades, and festivities. As other states struggled to get their financial houses in order, lawmakers in Bismarck were considering what to do with a $1.2 billion budget surplus.
North Dakota entered the recession with one of the lowest unemployment rates in the country. The state also benefited from a diversified economy, with manufacturing and agriculture both contributing to a healthy budget. North Dakota also had a history of lawmakers who pursued conservative fiscal policies. There was one other advantage that other states lacked. The booming oil industry provided both economic stability and job growth. Gross business volume for the petroleum sector had reached an estimated $8.23 billion by 2007. Government revenue benefited from the oil industry, creating financial stability as dramatic, rapid expansion grew into a stable production phase.
With North Dakota looking for more than 100,000 new workers and home values holding steady, state lawmakers considered measures that other states were unlikely to take up, including $400 million in property and income tax relief, $130 million more for kindergarten through 12th-grade education, 5 percent raises for state workers, and $18 million for expansion of a state heritage center. As one politician observed, “North Dakota never gets as good as the rest of the country or as bad as the rest of the country, and that’s fine with us.”
Dakota Datebook written by Dr. Carole Butcher
Sources:
- New York Times. “Wall St.’s Turmoil Sends Stocks Reeling.” https://www.nytimes.com/2008/09/16/business/worldbusiness/16markets.html?hpAccessed 8/24/2026.
- New York Times. “A Placid North Dakota Asks, Recession? What Recession?” New York City NY. 12/5/2008. https://www.nytimes.com/2008/12/06/us/06dakota.htmlAccessed 8/24/2008.
- Jason Henderson and Maria Akers. “Recession Catches Rural America.” https://www.kansascityfed.org/documents/1640/2009-Recession%20Catches%20Rural%20America.pdfAccessed 8/24/2026.
