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What’s Wrong with Minnesota?

by Alec on August 19, 2011

      The Minnesota GOP is about to initiate “reforms 2.0″ to get Minnesota back on track to greatness. Self described reforms guru Rep. Keith Downey (Edina) said, “The advice was to quit spending money you don’t have – separate your needs from your wants.” The problem is in the underlying definition of needs and wants. The Republicans in the GOP are laser focused on lowering business expenses at the expense of every day Minnesotans.

     Kurt Zellars, Speaker of the Minnesota House, has declared war on South Dakota. Zellers wants the low taxes and low regulations of South Dakota. What is more troubling, is Zellars wants the low wages of South Dakota as well. You see, in Republican eyes, the biggest problem with Minnesota is not quality of life for the average family. In Republican eyes, the biggest problem with Minnesota is that there is not enough wealth concentrated at the top.

     So, what is wrong with Minnesota that we need to race to become South Dakota? What is wrong with Minnesota so that we have to sprint to become Michigan (Detroit)? The Republicans will contend that our biggest problem is we just need to be more like South Dakota and Michigan.

     I don’t think we should be in such a hurry to emulate our neighbors to the East and West. Recently, Money Magazine came out with the top 100 places to live in America. Minnesota has five towns in the top 100 places to live in the whole country. Low tax South Dakota, North Dakota, and Michigan have a combined zero towns in the top 100. That’s right. Zero. So what are we going to war over? Why are we so envious of our neighbors? Do we really want to be like them?

     So, we have a great state for people. We have a great state for the average citizen. This would indicate we might want to tweak and refine but continue our history of support for a strong society. The beautiful thing is we don’t even need to throw the average citizen under the bus in our “war” for business. The well respected business journal Forbes has ranked the best states for business. Minnesota is already a very respectable 15th best state for business. What’s more, we are not far behind North Dakota at 11th. We are ahead of South Dakota who come in at 17th. Wisconsin is 43rd and Michigan is 48th!

    So, are we willing to risk the incredible quality of life of Minnesota in pursuit of becoming South Dakota or Michigan? This reckless pursuit of low wage jobs and irresponsible de-regulation threatens our way of life. What is the reward for this gambit? Possibly a better business climate, but most likely a lower quality of life and a worse business climate. Not willing to risk it all for non-existent payoff for the average Minnesotan.

(Tangential observation: As someone who as been in a real live war, we are not at war with our neighbors to the East and West. Not even in a metaphorical, or figurative sense.)  

AO August 19, 2011 at 8:36 pm

Let me first agree with you that Minnesota is a good place with great resources such as it’s people.  This led us to be a highly ranked place to live or be in business.  But to improve and lower unemployment let’s take a look at where we are not rated so highly.

Despite being highly taxed, our state government is still operating with structural deficits.  We spend more money on the poor and pour more money into things like light rail than other states, but eliminating those expenses would not result in the lower quality of life you predict that it would.  

I also don’t see anything wrong with pursuing jobs with low wages.  We should be pursuing ways to attract all jobs when we have unemployment at 7%.

Alec August 19, 2011 at 10:57 pm

Kicking people of their health care aid would not result in lower quality of life? It would be worse for them and us as a whole. Taking more money out of the pockets who need that for health or basic necessities does not make us a more livable place. Just because it wouldn’t hurt you immediately or personally does not mean it wouldn’t hurt anyone. A healthier society is a more stable society.

username August 19, 2011 at 8:43 pm

Zellers is sure we can have MN services with SD taxes. Every Republican you ever met knows that whatever the service is, it’s done better by the private sector, contrary to plenty of evidence.  Every investor and financial analyst will tell you what the Feds should be doing is stimulating the Economy, not cutting the budget, but you’ll never get a Republican to buy that.

There are no facts behind Republican economic dogma.  It’s just the beliefs of the Cult.  That’s what the 21st Century Republican Party has become, on both State and Federal levels.  It’s not even a real political party any more, just the Cult of No Taxes and No Facts.

AO August 19, 2011 at 9:12 pm

Where are your facts?  We can maybe agree that certain services performed by government would not be provided by the private sector if subsidies were cut, such as amtrak, light rail or green energy.  I don’t see anyone making the argument that public schools are better than private schools or that the VA provides better care than the more privately owned hospitals or clinics.  The difference between public and private is the profit motivation.  If you don’t provide what people want your business suffers or goes out of business–but in government you can raise revenues despite poor performance.  It’s almost too obvious to require further elaboration.

No, every investor and financial analyst does not want more government stimulus.  To believe that you’d have to believe that either every financial analyst voted Democrat, or the ones that voted Republican didn’t know what they were voting for.  Stimulus has failed.  Spending is the highest it’s been since WWII already.  Get spending back to levels we had during our growth periods and watch the private sector put their money into the things which have real demand, not the things government buys which otherwise would not be bought.

username August 19, 2011 at 10:08 pm

I’m in the industry, and I watch financial TV and read financial reports all day long.  You are simply wrong on this point.  It’s very close to unanimous.  Very few on Wall Street like what the Congressional Republicans have done to us.

AO August 19, 2011 at 10:48 pm

What investors want is a policy response that leads to growth.  They don’t want another trillion dollars in stimulus spending.  The majority may favor keeping interest rates predictably low, but the vast majority of conservative investors would rather the government reduce spending and taxes.

username August 19, 2011 at 11:40 pm

You need to start reading the financial press before you try to address this subject. Nobody, except hard core Republican ideologues, is talking about “reducing spending and taxes” today.  Our financial problem, and the world’s problem, is that the economy is stalling. Reducing government spending only exacerbates that problem.

What investors want is a stimulus, but a targeted stimulus. The stimulus set in motion in the Spring of 2009 worked. There’s no question among economists about that.  But it would have been more effective if it had been more carefully targeted, especially to include infrastructure spending.  What financial people want now is a stimulus that will encourage both infrastructure and consumer spending.

Our deficits are nowhere near a critical juncture. While we need a plan to address them in the long run, and that plan must include increasing revenues that are now at all time lows, deficits are not the present problem. The bond market’s reaction to S&P’s mistaken downgrade proved that.

username August 19, 2011 at 10:13 pm

Our structural deficit is directly attributable to the Jesse Ventura-installed permanent income tax cut, consistently defended by Gov Pawlenty and more recently by a Republican legislature, since it was created. Relieve that tax cut, which should have been temporary, and the structural deficit goes away.

“I also don’t see anything wrong with pursuing jobs with low wages.” you also say.

Compared with the other 49, Minnesota is a high-tax, high-service, high-wage state. Others, southern states in particular, have loosened environmental regulations, lowered wages, and made other concessions to quality of life, in order to attract industry.  

These are states where quality of life was already lower than ours. To attract industry, they’ve lowered their living standards further. Generally speaking the jobs these states have attracted with tax and other concessions have been lower paying jobs. It does not logically follow that a state with a far more attractive quality of life needs to, or should, follow the example of these poorer, less educated states.

Some Minnesotans nevertheless want to engage in the same race to the bottom that poorer states are engaged in. The end of any race to the bottom is at the bottom. Lowering standards to resolve a temporary situation is a good way to achieve permanently lower standards. That’s how we got the deficit.

Minnesota has survived, competed and prospered for many decades as a high education, high tech, high wage, high tax, high quality of life state. It has maintained this high quality status because it chose to do so.  

The choice has been driven, at least in part, by the northern European heritage of the state’s dominant populations. Germans and Scandinavians put forth the effort and personal sacrifice to assure the common good.  For Minnesota, that effort, including higher tax rates, has paid us back bountifully.

Minnesota has long been a national leader in education, health care,  technical and high paying industries, the arts, scientific research, professional sports, public services, and on and on. In most cases, these leadership positions were not caused by geographic location, and they were never caused by race-to-the-bottom competition to lower costs. Generally, these leadership positions can be tied back to the investment the state chooses to make in the common good.

What’s happening in Europe right now offers us a caution.  Europe’s high wage, high education, high tax states, eg Germany and other northern countries, are doing just fine.  It’s the states with lower standards, eg Greece, Italy, etc. that are in trouble, and that are dragging the whole of Europe down.

There’s no reason Minnesota can’t continue to make its long supported choice of high standards. To unilaterally lower wages and otherwise cut the state-sponsored support system for all this “high” stuff would push us into competition with low quality states, into the race to the bottom. A state like South Dakota may have no choice.  It cannot compete with Minnesota on any other grounds, so lowered taxes and regulations are its only chance.

Frankly (and I say this with due respect), if you don’t like Minnesota’s high-tax, high service culture, you should leave. A great thing about being an American is the freedom to relocate to a same-language, similar climate and customs but different economic culture place of your choosing. There are plenty of low tax, low quality of life states that would be happy to have you. But please, don’t ask us to drag ourselves down to their level.

AO August 19, 2011 at 11:07 pm

I’m talking about attracting jobs for the 7% of people in this state who aren’t working, not about lowering wages for everyone else.  If the companies that are paying higher wages in Minnesota find that they can get the same result by paying lower wages, they will do so.  In the same vein, if the state rose the minimum wage, the jobs that were below the new limit will decrease.  You can’t play around on the wage side expecting that companies will endlessly profit.

The level of services the state currently provides is far and above the services provided when the state was growing and quality of living increased.  Education and health and human services have gone through the roof and we’re aren’t able to pay for the annual increases above the rate of inflation anymore.   Paying teachers more than they’re worth and giving out more welfare money or meals on wheels does not lead to greater standard of living.  That’s not what got us here as we haven’t spent this much on government historically.  Things like MinnesotaCare weren’t started until 1992.  Cutting government spending is not the same thing as cutting standard of living for anyone but the people reliant on government who are not the economic drivers of this state.

Alec August 19, 2011 at 11:14 pm

They will swear up and down that taxes are the number one thing driving people out of Minnesota, yet they are still here. For some reason taxes are not #1 for them.  

Alec August 19, 2011 at 11:12 pm

VA has higher satisfaction than private sector. And they are more efficient. The private market sucks because there is incentive to deny care to increase profit. It is fact.

People love medicare way, way more than private insurance, and it is more efficient.

Those comparisons show the depth of Medicare’s popularity. According to a national CAHPS survey conducted by the Centers for Medicare and Medicaid Services in 2007, 56 percent of enrollees in traditional fee-for-service Medicare give their “health plan” a rating of 9 or 10 on a 0-10 scale. Similarly, 60 percent of seniors enrolled in Medicare Managed Care rated their plans a 9 or 10. But according to the CAHPS surveys compiled by HHS, only 40 percent of Americans enrolled in private health insurance gave their plans a 9 or 10 rating.

Government run TriCare for D.O.D. dependents and civilians has a 91% satisfaction rate.

Only 17% of privately run charter schools outperformed comparable public schools. Meanwhile, 37% of public schools outperformed comparable charters, over twice as high.

The private sector does production better. The public sector does taking care of people better.

When profit is not the motive, then the profit motive can only distort and bastardize.

AO August 19, 2011 at 11:29 pm

People may like getting something for “free”, but that doesn’t mean the actual level of care is better.  

Our comparisons are also muddied by the lack of a private market in healthcare.  You bring up medicare having high satisfaction, but they’re not being treated by government doctors.  They’re getting the treatment from the same doctors as you and me but paying less for it, causing the rest of us to pay more.  I’m sure that could create a great survey for medicare, but it wouldn’t reflect a true comparison of a private vs public system.

And how are charter schools private? When we compare private schools like Cretin-Derham Hall with public schools like St. Paul Central, it’s no wonder parents will choose to send their kids to the private school despite having to pay for the public schools even if they don’t send their kids there.

Alec August 19, 2011 at 11:46 pm

If you want to support class sizes of 20 or less, just like Cretin, I’m all for that. Comparing a school that costs thousands, requires super dedicated parents, and has tiny class sizes to a large public high school is retarded, unless you are will to fork over the money that it takes to make Central just like Cretin.

Thank you for proving my point AO.

Grace Kelly August 20, 2011 at 2:18 am

The Richest want to live in a state with the best not the cheapest. The whole assumption of AO(above) is dead wrong. Our problem is that we really are downsliding on the best scale. Basically the Rich are out choosing between Bugatti Veyron Super Sports car or a Lamborghini Reventon in terms of what state they would like to live and the Republicans want to make us a cheap clunker like Mississippi, where no one wants to live.  

AO August 20, 2011 at 2:24 am

Are the rich going to be heartbroken if teachers are paid 10% less or there is less medicaid money going around????  How is that even close getting down to mississippi’s level?

Alec August 20, 2011 at 3:27 am

The suffering of your neighbor takes its toll on all of us, emotionally, spiritually, and mentally. Just because a loss of medicaid does not affect you, it will affect many, many of your neighbors. their struggles do not happen in a vacuum. We are an interconnected and interdependent world.  

AO August 20, 2011 at 4:08 am

This is true to an extent, but if we were to extend this hypothetical out of rich people placing importance on government service levels, do you really think they would perceive a difference between the Dayton plan or the Emmer plan for medicaid, or other programs for the poor in this state?  I’m guessing they would feel for the poor in either case, and may be more inclined to give to charity if the reductions in service caused more homelessness or starvation.

AO August 20, 2011 at 12:22 am

Yes, I read the financial press.  What you are talking about is the keynesian view that we should deficit spend in times of recession to smooth out the downturn.  The financial press doesn’t spend a lot of time arguing for either the keynesians or supply siders politically, instead focusing on the actual market as it is, rather than the votes necessary to pass something one way or the other.

How can you say the stimulus worked?  9% unemployment, and you still would rather spend more money to dig holes in the ground and fill back them back up again and call it “needed infrastructure”.  The best stimulus of all is more money in the hands of the private sector who will find the most productive use for it.  

Deficits are a problem now and in the future.  Revenue is low, but spending is very high.  We had revenues increasing after the bush tax cuts before the recession.  It wasn’t the tax rates that caused the recession.  The current rates will generate plenty of revenue in a normal economy.

AO August 20, 2011 at 12:31 am

Tuition at CDH is $10,000.  St. Paul public schools cost the taxpayer $16,500 per student.  More performance for less money.

Alec August 20, 2011 at 12:41 am

How many special ed kids?
How many kids who don’t speak English?
How many cognitively disabled kids?
How many kids that come from juvenile detention centers?

I’ll clue you in AO, they have zero. They could not educate all kids even as close to as efficient as the public schools. They do not even try. That is not a role they fill.

It’s like comparing the Saint Paul Saints to the Minnesota Twins. The Twins are way better than the Saints, so the Saints organization must be terrible.  

seano August 20, 2011 at 1:32 am

According to the CDH annual report (most recent one available — 2009-10), tuition only represents 63.7% of the school’s revenue.  So, with a little back of the envelope math, I get CDH spending about $15,700 per student.  Pretty comparable given the extra things the St. Paul district has to provide that CDH doesn’t.

AO August 20, 2011 at 1:01 am

Give a private school $10,000 per kid and watch them learn.  Is there some special teacher invention that the public schools have exclusive use of?  Everyone doesn’t have to go to Cretin, there would certainly be private schools for the special ed and non-english speakers if the public schools were eliminated.

seano August 20, 2011 at 1:41 am

it may be $14,330 per student — there $1.9 million in tuition assistance that is not clear if it’s already included in the other revenue figures.

AO August 20, 2011 at 2:07 am

to compare st. paul public with cretin, we could simply not count the freewill donations given to st. paul public schools, but I doubt they would make much difference.

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