When I was researching my 2007 book, God and Country: America in Red and Blue, I came across surveys that asked clergy of various denominations about their economic policy preferences and beliefs. Not surprisingly, there was a split among Protestants between those who favored the “Social Gospel” and those we might think of as Social Darwinists.
What did surprise me was the discovery that the most conservative clergy viewed capitalism as the only economic system compatible with Christianity–as though Adam Smith’s “Hidden Hand” was another word for God.
Clergy aren’t the only folks whose economic beliefs have a whiff of religious ferver about them, of course. That’s what makes economic policy so tricky–ideology regularly trumps evidence. I thought about that when I read a recent article in the New York Times comparing economic performance of Wisconsin and Minnesota, states with similar histories, political cultures and weather.
In 2010, Wisconsin–as everyone who follows politics knows–elected Republican majorities in both houses of its legislature and Scott Walker (very rightwing protege of the Koch brothers) as Governor. Also in 2010, Minnesota elected Mark Dayton, described by the Times as one of the most progressive candidates for governor in the country, and in 2012 gave him a Democratic legislature to work with.
Minnesota raised taxes by 2.1 billion dollars, and introduced the fourth highest income tax bracket in the country. Wisconsin, under Walker, reduced taxes and spending, and attacked the collective bargaining rights of unions.
So–how have these states fared? According to the article, three years into Walker’s term, Wisconsin ranks 34th in the nation for job growth, well behind Minnesota, which has the fifth fastest-growing state economy. (Forbes ranks Minnesota as the 8th best state for business.) This is particularly noteworthy, since Minnesota’s economy was “subpar” under Dayton’s predecessor, Tim Pawlenty.
Dayton invested heavily in K-12 education and all-day kindergarden; Walker cut state funding of K-12 schools by more than 15%.
Dayton expanded Medicaid, and created a state insurance exchange that enrolled 90% of its first month’s target. Premiums in Minnesota are on average the lowest in the country. Walker refused to expand Medicaid or create an exchange, and as the Times reports, “The uninsured and ill bear the burden.”
Everything isn’t peachy in Minnesota, but it’s hard to ignore the difference in economic performance–not to mention quality of life–between the two approaches. It turns out that beating up on school teachers and other public servants while giving tax breaks to the wealthy doesn’t produce jobs or spur economic growth. It also turns out that raising taxes isn’t necessarily an economic kiss of death.
Not that evidence matters. There’s a reason we call it “blind faith.”