Minnesota and Wisconsin share common roots: both were settled primarily by German and Northern European immigrants; both states engage heavily in farming; and, until recently, both shared a political culture of populist progressivism. So when their politics diverged (with the election of Scott Walker in Wisconsin and Mark Dayton in Minnesota), it created a natural experiment.
What happens when you apply dramatically different economic policies in otherwise very similar states?
These two governors aren’t simply Republican and Democrat: Walker is a wholly-owned subsidiary of the Koch Brothers and espouses their brand of radical conservatism with almost religious zeal; Dayton is an unabashedly progressive Democrat. The two of them took their respective states in diametrically different directions. Walker attacked unions, cut property taxes and cut funding for education and infrastructure. Dayton raised taxes by 2.1 billion, and increased funding for primary and secondary education by $485 million, among other things.
So which state is doing better economically?
Minnesota’s Department of Revenue recently announced that the state’s budget SURPLUS has risen to $1 billion. At the same time, its unemployment rate in November was the lowest since 2001 – 3.7%. Minnesota is the fifth fastest growing state economy, with private-sector job growth exceeding pre-recession levels. Forbes rates Minnesota as the eighth best state for business.
Meanwhile, Wisconsin’s budget DEFICIT sits at $1.8 billion and its unemployment rate is 5.2%. It ranks 34th for job growth.
Rhetoric may carry the day on Faux News, but on the ground, policies have real-world consequences.
Chase Downham, Indiana state director of Americans for Prosperity, published “His View” in yesterday’s Indianapolis Star. He has four suggestions for the IN legislature “…to keep Indiana on track to becoming the economic beacon of the Midwest”: destroy construction and teacher unions, fight EPA Clean Power regulations, and “a fiscally responsible budget.” He wants more school vouchers and charter schools, and each teacher to negotiate his/her contract. I didn’t make this up. Read it for yourself. Downham thinks MN moved from the Midwest. He must also think the earth is flat. AFP’s sponsors, the Koch brothers, have done their job well.
Perfect examples;
When you invest you grow the economy when you devest you shrink the economy. That holds true for Infristructure, Human Capitol, Public Health, Enviromental Wellbeing , Public Education and on and on.
Look a the American Republican South and the Moderate North regions of our nation for another example if it wasn’t for air conditioning, tourism and snowbirds the south would collapse under the weight of its unemployment, poor health, under educated, poor transportation, religious intolerance and abundant ignorance and on and on.
Well-what a surprise!!
I find it ironic that the right believes you have to be able to invest endlessly in business to make it successful, but government becomes successful by continually slashing its funding.
We each choose to view the future as opportunity or threat. Those who view it as threatening are called conservatives. Those who view it as full of opportunity are called liberals. Those views are self fulfilling and therefore reinforcing. Conservatives drag the world down around them and say, “see?” Liberals spawn progress and say, “see?”
The parties no longer represent a populous view and a business view. They represent liberal and conservative views.
Thus the drag of conservatism affects not just government that they touch but business and religion as well.
So, here we are. What do we do about it?
I think that America’s trajectory will largely hinge on two specific policy issues. A carbon tax to pay for the adaptation and recovery we surely face from our inability to mitigate climate change in time. Our inability to decarbonize energy soon enough. And campaign financing reform. Base all poitical campaigning on government funded public debates only.
Two specific policies. Possible? I believe that both now depend on who gets out more votes in 2016.
Those who embrace vs those who fear the future. And either winner will move America in their way and claim that the results were inevitable.
One condition that spawns conservatism is the notion that I have enough therefore I need to protect it from decline.
The complementary condition or worldview that spawns liberalism that WE can be better; there is plenty of opportunity to improve.
One additional thought on a carbon tax. It is both push and pull. It will push those profiting from changing our climate now out of business and provide monetary incentive to pull those launching sustainable businesses up.
It’s benefit in moving of the cost of recovery and adaptation from tax payers in general to those profiting from creating the problem is an additional benefit.
If we do it the measure of our success is simply how many fossil fuel assets become stranded. Buried safe in the ground where we found them.
O.K., there are enough data to please the choir. How much do we need to convince the unbelieving ideologues that their policies will only ruin the place? How can it be communicated to convert the base instead of just making them angry?
Reminds me of the D.A.R.E. program. There are solid and incontrovertible data to show that D.A.R.E. is ineffective. What do the advocates say to that? Not enough money is being spent on the program, so we need to double it.
Hmmmm, you’ve tread onto the topic of “Economic Development” and I’m challenged to respond in a constructive way without just vomiting a pure rant in the style of Neil Cassady and Jack Kerouac all over your blog page. . .
It’s really hard to fight established Dogma. Just ask Pope Francis. There is no body of work in the field of economic theory and its applied quantitative cousin econometrics that has been more thoroughly discredited, peer-criticized, and dis-proven by 30 years of economic policy experience than that of Arthur Laffer, creator of the “Laffer Curve”. As you’ll recall he gained popularity during the Reagan Presidency with his snake oil solution to all our country’s economic woes: that tax cuts will always pay for themselves with higher tax revenues from the increased economic and income growth that will result from said tax cuts. Of course the Republicans will argue that the 25 year period of economic expansion occurred exclusively as a result of Reagan’s tax reform package. Never mind that the period of expansion started in ’82 and the Tax Reform Act of 1986 was passed four years after that. Most economist agree that the expansion was driven by people like me, and 70+ million other Boomers who were just entering the most productive years of their working lives. Other factors were opening trade with China and other countries as well as the digital revolution, including an invention that never gets enough credit: methods of supply-chain-management and software to run it. The latter two are what allowed the US to offshore a big share of its manufacturing base, the good news being untold riches for those who owned stock in General Electric, or worked in the I/T software development or other growth industries. But if you were a relatively unskilled factory worker….your future was pretty bleak.
Enter GW Bush in 2001 with one of largest tax reductions in US history passed and signed two years later, but with such great reservation that Congress would only enact it for 10 years. And of course, 11 short years later, 2 more wars, and a world-financial-system-bubble-bursting depression (yes, economists define a downturn created 10% or more unemployment as a depression), we have saddled the next 5 generations of US citizens with an $18 Trillion national debt, created mostly by….tax cuts for people who needed them least. Of course, per Mr. Paul Ryan would have you believe the only path to salvation out of ruination is to curtail spending on entitlement programs such as Social Security and Medicare (which are is NOT an entitlement programs, just poorly managed and under-funded insurance programs). If our parents were from The Greatest Generation, I submit that The Boomers Generation, formerly known as the “Me Generation” must surely be the worst, unless you go back to the final slavery-preservation days of the 1850’s. But that’s a whole other subject for discussion.
As I said, dogma never dies. For the past 5 years Mr. Laffer hasn’t had much of an audience in Washington. Not a problem though, because Republican governors love him and none love him more than our own Governor Putz. But there was another Governor who used to love him even more and that was Sam Brownback of Kansas. I won’t summarize what Gov. Brownback did in Kansas – you can read about it on your own in the excellent article on Politico yesterday: http://www.politico.com/story/2014/12/gop-learns-lessons-from-brownbacks-tax-scare-113806.html. If Ms. Kennedy thinks Scott Walker led all those good cheeseheads and Packer fans down a ruinous road compared to Minnesota, just look at Kansas, a somewhat traditionally more conservative but eminently sensible Midwestern state. But here’s the really scary part: Brownback got re-elected in 2014.
There are literally millions of people who have not only sipped the magical Laffer elixer – they have mainlined it into the largest vein they could find on their bodies.
This is both good and bad news for Hoosiers. The good news is that we still have one or two Indiana Republican legislators in critical leadership positions who are not totally insane and are heeding to the Kansas experience. And they have put our Governor Putz on public notice that there will be no more significant tax cut or reform legislation in the 2015 budget-setting session, primarily because 1) the sacred $2B state surplus MUST be preserved at all costs (with no one but them understanding why) and 2) The Dept of Revenue and others have mixed projections on just how much future tax revenues will grow, or shrink. There are also still previously-enacted tax cuts that will take effect in 2016 and 2017 and we are STILL working through the full impacts of the residential property tax caps of 2010 (Look for Putz to try and eliminate or dramatically reduce the Homestead credit this year).
The bad news is that since Putz can’t have more tax cuts, he desperately needed another 2015 agenda to rally his Tea-Party base, who of late have derided him of being too left wing (imagine that!). His answer? DOUBLE DOWN on the privatization of public education. More charter schools, despite 30 years of accumulated evidence they make only anecdotal improvements in education outcomes, and more and larger vouchers, expanding them to include families who, again, don’t need them. The end result: A much smaller public education system that caters primarily to children of poverty, or with disabilities, or for whom English is not their native language, or whose parents just don’t give a shit what kind of education their kids get. All this state-wide chaos and robbery of the treasury just because there’s a good buck to be made from it AND because the cities of Indianapolis, Gary and Muncie allowed their public school systems to become train wrecks after years of neglect, poor management and oversight, and white flight to the ‘burbs.
So as Indiana, Wisconsin and Texas race to the bottom to see which can first become the most like a third world country, I’m not worried about Scott Walker.
I’m worried about Mike Putz, and I’m even more worried about the millions of hard working Hoosiers that support his policies…as many of them will ultimately suffer the most.
nice stats, but what was the situation at the time of the election? Wisc. was deeply in debt when Walker was elected. Got to start with the baseline.
Ted, Minnesota had been struggling with deficits and had been balancing its budgets by (Republican) cutting programs to the poor, sick, mentally ill and children. It was a nightmare under our previous governor. Minnesota generally has lower unemployment than Wisc and the rest of the nation.
Hooray! German Farmer Progressive Populists are the heroes! Finally!
I don’t know what you are talking about.
We all know that those are the “FAILED policies of Liberalism” (emphasis added – couldn’t find the Trade Mark symbol) and that the “common-sense Republican Conservative ideas” are always right not to mention ordained by the Deity.
Therefore Minnesota must be a disaster and Wisconsin is a raging success!!!
Of course I believe my lying eyes. Just don’t try to confuse me with the truth.
Mr. Colbert may have retired his show, but truthiness prevails forever.
So, then, why does the country, after almost 7 years of Obama, now have 56 million Americans between 16 and 65 given up looking for work, 46 million on food stamps, almost 50 million in poverty, 11 million claiming disability to survive and an increase in the national debt by the end of next year that will exceed that of all 43 previous presidents COMBINED? And his solution is to a) shut down the coal industry and b) to dump 20 million illegal aliens onto the backs of the poorest Americans.