June 29-30, 2011
Jun 29 00:52 Why Don't Media, DFL Factor In Economic Growth? Jun 29 04:12 St. Cloud Townhall Audience is Picture of Minnesota Nice Jun 29 15:47 Judge Gearin's Ruling a Loss for Gov. Dayton Jun 29 20:41 Democrats: The Living in the Past Party Jun 30 03:38 Questions for the Impasse
Prior Months: Jan Feb Mar Apr May
Prior Years: 2006 2007 2008 2009 2010
Why Don't Media, DFL Factor In Economic Growth?
The first thing I thought after reading this Strib editorial was that the sole focus is on Republicans' refusal to raise taxes in a faltering economy. The next thing I thought about is that the Twin Cities media never thinks about economic growth as part of the budget equation.
Word came from the Department of Transportation that the bridge is now deemed a critical service by the Dayton administration. The courts willing, the governor now aims to continue the bridge's regular rise and fall if other government functions cease.
So Republicans replayed last week's talking points instead. They asked Dayton to call them into special session before a full budget agreement is in place, something he has said he will not do.
And they gave no indication that they are willing to spend more than the $34 billion contained in bills that Dayton vetoed last month.
I can't express my disappointment with the Twin Cities media strongly enough. Rather than thinking in terms of what's best for Minnesota's economy, the Twin Cities media has focused on funding an antiquated form of government that was outdated by Clinton administration standards.
At no point in their editorial does the Strib editorial staff talk about how important putting in place policies that let job creators create jobs. At no point does the Strib editorial board consider the possibility that a strong economy properly funds Minnesota's priorities.
This paragraph is particularly infuriating:
That turned the bridge into an emblem of misplaced focus by state leaders, on both sides. With only days remaining before the shutdown deadline, lawmakers ought to have been devoting all of their energies Monday to pursuit of a bipartisan compromise.
Immediately after that paragraph, the Strib returned to attacking Republicans. What a waste of bandwidth and ink.
As for "pursuit of a bipartisan compromise", I'd argue that doing what's best for Minnesota should rate as a higher priority. I don't give a damn if an agreement is bipartisan in nature. When the DFL intends on looking out only for their special interest allies, then something is seriously wrong.
I've said it before and I'll repeat it again: the DFL is the party that wants to fund a 1970s form of government; Republicans are the party that wants to build a 21st Century economy. It's just that simple.
Rumors had been swirling that GOP leaders had finally recognized what was apparent to most Minnesotans soon after the 2010 election: Enacting a new budget would require that Republicans meet the new DFL governor at least partway, with a larger budget than "no new taxes" affords.
Again, political realities be damned. Doing what's right for Minnesotans is most important. I don't want to play nice if the other side has shown that they're only interested in doing what's in their special interest allies' best interest.
While it's true that fixing Minnesota's economy won't straighten out all of our problems, I'm confident that taking that step would help alot.
Posted Wednesday, June 29, 2011 12:52 AM
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St. Cloud Townhall Audience is Picture of Minnesota Nice
Tonight's townhall meeting at the St. Cloud Library was a portrait of Minnesota Nice. That doesn't mean there weren't a number of sharp questions and suggestions on how to solve the state's budget crisis.
One woman that identified herself as working for a nonprofit asked if they'd get paid for work they'd done during a government shutdown. She also asked whether that would affect federal dollars. Another lady asked how the budget could be the biggest in state history and still be considered an all-cuts budget. That lady then asked why anyone would think that raising taxes won't take money out of the private sector.
Though things got a little contentious during the last segment of the meeting, it was nothing like the contentiousness from last Monday's townhall held at the Haven Township Hall .
During the second segment, Chuck Rau said that "Fifteen years ago, private employers moved away from defined benefit pensions to defined contributions because we had to." He then asked why state employees hadn't gone to that type of retirement system.
Mayor Dave Kleis moderated the event, breaking things down into half hour segments. Twenty minutes of each segment was devoted to people asking questions, with the other 10 minutes devoted to King answering questions.
Rep. Steve Gottwalt was scheduled to co-host the event but wasn't able to attend. In the middle of Tuesday afternoon, I saw a tweet talking about a brief negotiation period on the HHS bill had yielded some positive results. As a result of that, the tweet said that they'd be holding another negotiating session starting at 4:00 pm Tuesday afternoon.
Shortly after seeing that tweet, I contacted Rep. Gottwalt to verify whether he'd be participating in the negotiations or whether he'd be participating in Tuesday's townhall. Shortly thereafter, Rep. Gottwalt confirmed to me that he'd be participating in the HHS negotiations.
During the event, a wide range of questions were asked. Others chose to make suggestions. Though not as many as last week's townhall, many questions focused on "the richest [fill in percentage] percent" paying their fair share.
King responded to most of the questions, including answering one tax the rich question with a question. King asked what percent was a rich person's fair share. He then noted that capital and labor were more mobile than they were a generation ago. He then said that that's why it isn't possible to raise taxes on the rich without risking capital flight.
The crowd of approximately 60-70 people were generally well-behaved compared with last week's agitated bunch that pushed the message that Republicans had to compromise with Gov. Dayton. Then again, Tuesday night's group wasn't as filled with public employee unions as last week's event was.
Mayor Kleis, Rep. Banaian and the audience each deserve kudos for the integral parts they played in the townhall. There were still disagreements but they each played a role in showing how people can disagree without being disagreeable.
Posted Wednesday, June 29, 2011 4:12 AM
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Judge Gearin's Ruling a Loss for Gov. Dayton
Considering the fact that Gov. Dayton's plan was to maximize the hurt on Minnesota , Judge Gearin's ruling dramatically limits his ability in that respect. In that respect, Mitch's post is 100% correct:
Mark Dayton's attempt to push all the pain of this shutdown onto this state's most vulnerable residents, which we've been documenting for weeks, although the mainstream media can't seem to be bothered, has been rebuffed for now.
For me, Finding of Fact # 39 sums things up pretty nicely:
The Court agrees with the position of the League of Minnesota Cities, the Coalition of Greater Minnesota Cities and the City of St. Paul regarding Local Government Aid legislation. These funds have already been lawfully appropriated and should be paid on schedule. This is also true regarding previously lawfully appropriated payments to school districts.
I'm not arguing that LGA is a policy worth keeping. I'm simply arguing that money already lawfully appropriated should continue to be paid according to the schedule agreed upon by the legislature and governor.
The reason why 39 is important is because it says Gov. Dayton can't hold school districts hostage. Imagine the PR mileage he would've gotten from filming boarded up schools and children not being able to stay on course for graduation.
That PR weapon was effectively removed from Gov. Dayton's hands.
At last night's townhall meeting, a number of people spoke out of fear that a shutdown would leave them paying for their own medications and their health care. The Dayton administration worked hard to build that fear in their attempt to pressure Republicans into accepting a major tax increase.
Now that that's eliminated as a weapon, it's reasonable to think that alot of the pain Gov. Dayton was hoping to inflict on people has subsided. In fact, I'm betting alot of nonprofits that rely on federal funding passing through the general fund account breathed a huge sigh of relief after hearing Judge Gearin's ruling.
There's still alot of work to be done in resolving the budget issue. Still, this is a victory for Republicans because Judge Gearin took the PR tools out of Gov. Dayton's hands.
Posted Wednesday, June 29, 2011 3:47 PM
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Democrats: The Living in the Past Party
Earlier this afternoon, I saw this tweet from Eric Pusey :
Ruh Roh - Lowering taxes doesn't create jobs? http://ow.ly/5taK1 Say it ain't so
I knew it had to be an extreme stretch so I read the post . Here's the basis for their opinion:
In fact, as Center for American Progress Director of Tax and Budget Policy Michael Linden found, 'in the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now':
For instance, in years when the top marginal rate was more than 90 percent, the average annual growth in total payroll employment was 2 percent. In years when the top marginal rate was 35 percent or less, which it is now, employment grew by an average of just 0.4 percent.
And there's no cherry-picking here. Pick any threshold. When the marginal tax rate was 50 percent or above, annual employment growth averaged 2.3 percent, and when the rate was under 50, growth was half that.
In fact, if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher. The top 10 years would share marginal tax rates at 50 percent or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35 percent. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.
I'd say that that's a flimsy argument if I didn't want to offend flimsy arguments. The argument is pathetic for a bunch of reasons.
First, economic conditions in the 1950s were dramatically different than we're facing today. We were building factories at a significantly faster pace than they're being built today. The baby boom generation was being born so new home construction was skyrocketing. We were building the interstate highway system, an infrastructure project that dramatically improved our competitiveness and productivity.
Let's also consider that there wasn't a global economy during the 1950s. With capital and labor essentially having unlimited mobility, and with other countries envious of our standard of living, it would stupid to think that tax rates don't matter in today's world.
Therein lies the problem. Like Mark Dayton, today's Democrats think of the world in 1970s (or earlier) terms. Those were the good old days. In their thinking, returning to those glory days simply means doing what they did half a century ago.
Some things work like that. Give people a reason to be productive and it's likely that they'll be productive. Confiscating 70+ percent of an entrepreneur's income isn't giving an entrepreneur much incentive to be productive.
It's time that Democrats stopped living in the past. It's time that they understand that capitalism will succeed because free market capitalism is based on human nature taking its course.
Posted Wednesday, June 29, 2011 8:41 PM
Comment 1 by nerdbert at 30-Jun-11 10:29 AM
I think you underestimate the differences. In the 50s the US was the only major country with a fully functional infrastructure that hadn't been razed by WWII. We were exporting the machines to rebuild Europe and Asia to countries that couldn't supply themselves even the basics. We could AFFORD to have high taxes and inefficiencies.
These days? Not so much. We've been hamstrung by those years of high living into thinking that we'll always be the only supplier of capital goods to the world and that's not the case. We have to adjust our standard of living and especially of spending to account for that.
Comment 2 by j.l. at 02-Jul-11 08:00 PM
Another thing not mentioned in the article is that when the marginal rates were so high, there were a lot more tax loopholes that could, and would effect how much tax was paid. Another way to look at is- in the 1950's when the top rate at one point was 91%, did federal agencies have enough money or did they consistently ask for more? Were there still the poor and the disadvantaged? Answers to both, of course, yes.
Questions for the Impasse
With the state apparently heading for a shutdown, it's time to review Minnesota's priorities, not just our budget policies. Readers of this blog know that I've been asking 4 questions about raising taxes. Here are those questions:
Will raising taxes strengthen Minnesota's economy?
Will raising taxes improve Minnesota's competitiveness either regionally, nationally or internationally?
Will raising taxes create prosperity?
Will raising taxes give entrepreneurs an incentive to put their capital at risk?
It's time to replace that set of questions with a fresh set of questions. Here's that fresh set of questions:
Will raising taxes strengthen Minnesota's economy?
Will raising taxes increase job growth?
Is spending money on antiquated programs that should've been reformed a decade ago the best use of taxpayers' money?
If KSTP/SUSA polled those questions, I'm betting Minnesotans would reject a budget that raised taxes and funded antiquated government programs by a huge margin. What taxpayer enjoys hearing that their taxes aren't being spent wisely? What Minnesotan thinks that enacting policies that hurt our economy are what's needed right now? What person thinks that raising taxes will create dynamic, well-paying private sector jobs?
The debate we're currently having in the Minnesota media is entirely the wrong debate. Specific policies should be set aside until Minnesota's priorities are first determined, then clearly articulated. Once that's done, the policies will fit into place quickly.
Nobody will argue that Minnesotans pride themselves on innovation. With that established as a dominant part of Minnesota's personality, the next step is determining which government programs and agencies either have outlived their usefulness or could be done better with some tweeks or with significant changes.
These are the types of discussions Minnesotans are having with their neighbors and, to a certain extent, politicians are having. Dan Fabian, Keith Downey and King Banaian are three reformers in the House. Roger Chamberlain, David Hann and Amy Koch are reformers on the Senate side.
In both instances, they're only part of the reformers in the state legislature.
The next step in this discussion should be to prioritize our reforms. Photo ID, HHS reform, as well as MnSCU reform, in my opinion, should be the next targets now that permitting reform and alternative teacher licensure have passed.
Notice that the highest priority items don't include tax increases or major spending hikes. Frankly, raising taxes isn't remotely close to being a priority for most Minnesotans.
Will some Minnesotans accept a tax increase? Yes, but only if it's on someone else. Is it something that they're insisting on getting passed? Nope.
Republicans should take this message of economic growth, governmental reform and Minnesota's revitalized commitment to innovation to the four corners of the state this summer.
If they do, they'll win this budget fight with the DFL. Handily.
Posted Thursday, June 30, 2011 3:38 AM
Comment 1 by C Quigley at 30-Jun-11 07:53 AM
It doesn't matter to liberals if tax increases hamper the state's economic growth. What matters to liberals is if the so called rich pay their fair share. What they need to pay more for is beyond me but that's the way a liberal rationalizes an economy crippling tax increase.
Comment 2 by eric z at 30-Jun-11 11:07 PM
CQ - If I were rich, I'd love you. You'd rather pay more so that Helmsley at UnitedHealth can get a free ride on your shoulders.
And CQ, other than you and Gary believing "tax increases hamper the state's economic growth," have you any basis to say that?
If you want to complain about the Fed and banks and the credit crunch, I'd listen to you and wonder why you are not mentioning Ron Paul.
Response 2.1 by Gary Gross at 01-Jul-11 04:07 AM
Eric, Wednesday night, MN2020 tweeted that "if you want lower taxes, move to the south", as in Georgia, Alabama, Florida, Texas & Tennessee. My reply was straightforward: "Pay attention. People already are." Minnesota almost lost a house seat. New York lost 2, Michigan lost 1, as did Ohio, Pennsylvania & Illinois.
Minnesota's economy isn't growing because productive people aren't moving here. Productive people aren't moving here because of the threat of high taxes & the reality of crushing overregulation on health care & the environment.
This delusion that the DFL can keep threatening tax hikes on the rich to pay for their wild spending habits is killing this state. Reapportionment proves that.
