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Last week, I received an email from Sarah Anderson talking about the state budget surplus. Rep. Anderson wrote “Dear Neighbors, today the state budget forecast was released showing a whopping $1.54 billion surplus.” We have another $2.45 billion in the State’s rainy day fund. Despite all this money sitting in Minnesota’s coffers, it’s stunning that the DFL is pushing tax increases.

It’s time to ditch Minnesota’s ‘business model’ and establish new priorities. The achievement gap isn’t closing, at least not compared to what they should be for all the money that’s gotten spent.

Minnesota’s economy isn’t terrible but it isn’t exactly hitting on all cylinders, either. The DFL spent most of the last decade building Minnesota’s government instead of building Minnesota’s economy. In 2013, Gov. Dayton and the DFL legislature passed the biggest tax hikes in Minnesota history. Since then, the middle class of all age groups have left Minnesota. The only income group that’s increasing their percent in the state are the lowest incomes.

It makes sense. From an education standpoint, Minnesota is mediocre. From a taxes and regulations perspective, Minnesota isn’t competitive. It isn’t close. If the DFL doesn’t admit that their blueprint isn’t working, we’ll quickly turn into a cold California. Why does the DFL think that raising taxes will strengthen the economy?

In 2007, the DFL insisted that spending should be indexed to inflation. Now Melissa Hortman insists that, because spending isn’t tied to inflation, the $1.54 billion surplus is really only $382,000,000. According to Hortman, that’s justification for additional tax hikes.

The moral to this story is that the DFL doesn’t understand a thing about economic competitiveness. They want their tax hikes regardless of whether it hurts or not. This move hurts badly. Throughout the state, people from all income groups (except the poor and the working poor) are leaving for lower-tax states. That’s what’s driving the worker shortage.

Let’s hope Hortman and Walz don’t kill Minnesota’s economic competitiveness entirely. BTW, this is how socialism kills economies. When people lose the ability to make profits, they either leave the state or they stop making what they’d been making.

According to this article, the Center for the American Experiment is ruffling a few feathers with its recent report on Minnesota’s economy. Economist John Phelan, the author of the report, wrote that “The state’s economy is growing, but it’s growing below the national average.”

Later in the article, it says “Phelan cited data that has become popular with conservative economists: gross domestic product per worker. By that measure, Minnesota ranks 28th among the 50 states and Washington, D.C., and is well below the national average. It’s in stark contrast to the figures cited by economists, including gross domestic product per capita. By that measure, Minnesota is indeed above the national average and ranked 15th. The difference is that per capita measures the state’s economy against its entire population, while per worker measures it against only those who are employed.”

Economists can argue which is the better way of measuring economic growth. The only thing that people care about are whether lots of good-paying jobs are getting created. They aren’t. If the economy was creating lots of good-paying jobs, there wouldn’t need to be a push for a $15/hr. minimum wage because the economy would be creating lots of jobs that pay more than that.

Further, companies and people are moving out of Minnesota for places like North Carolina, Georgia, Texas and other states because Minnesota’s business climate sucks. The DFL argues that we just need a well-trained work force. I don’t disagree that we need skilled workers but I’ll vehemently disagree that that’s all we need. I was stunned to hear during the campaign that Minnesota’s lowest income tax bracket was higher than the top bracket in 20+ states.

That’s before we talk about Minnesota’s regulatory regime. Saying that it’s stifling is understatement. It’s designed to prevent competition and prevent economic growth. Most of it is built to appease the environmental activists and encourage lawsuits.

Given the high taxes and punishing regulations, why would anyone build or expand their business in Minnesota? They’d have to be masochistic.

You’d never know it by the MSM’s coverage but President Trump had a pretty successful G20 summit. Liz Peek’s article highlights those victories. Ms. Peek wrote that “President Trump scored major successes at the G-20 summit that concluded over the weekend in Argentina. Specifically, the community of nations agreed in their official communique to ‘necessary reform’ of the World Trade Organization, a top White House priority, and recognized the decision of the U.S. to withdraw from the Paris Climate Accord, and to still utilize ‘all energy sources and technologies, while protecting the environment.’ In addition, the Chinese promised to up their purchases of U.S.- made goods and to discuss other demands in exchange for postponing an expected hike in tariffs; President Xi also committed to designating the deadly drug Fentanyl as a controlled substance in China, and vowed to help with de-nuclearizing North Korea.”

That’s just the start. President Trump signed the new and improved trade deal between the US, Mexico and Canada. Later that morning, he met with Japanese Prime Minister Abe and Indian Prime Minister Modi. That sent a strong signal to China that South Korea, Japan and India have sided with the US, not with China. In terms of strategic importance, this development can’t be emphasized enough. China is already buckling during these tariff fights.

Thanks to Trump’s strategic pressure, China has started giving in to President Trump’s trade demands. That’s led to a major increase today for trade-sensitive stocks.”

BTW, the Dow finished up almost 288 points today. They certainly liked what they heard from the G20.

To be sure, there’s some noise coming from the Mueller witch hunt but that’s just noise. It isn’t anything that the American people take seriously. That being said, I don’t doubt that Mueller will weave together a document that Democrats will pounce on. They don’t have a choice on that. That being said, it’s difficult taking him seriously.

Finally, this is good news if it happens:

Trade negotiations between the U.S. and China will yield immediate results that will come even during the 90-day negotiation period ahead, National Economic Council Director Larry Kudlow said Monday.

Tariffs on agriculture and energy products will be lowered while nontariff barriers on American ownership of companies in China also will come down, Kudlow told the Fox Business Network. In addition, Kudlow expects progress on technology transfers and intellectual property.

“Those things should kick in soon. We should see palpable change on the Chinese side immediately,” he said. “I don’t want to be too specific, but I think the generic answer is we will see changes very quickly.”

I don’t think I’m outlandish in saying that the Democrats’ economic plan is short on growth and heavy on regulations and socialism.

For instance, the “presumptive incoming speaker, Nancy Pelosi, has vowed to pass this wage floor [$15 minimum wage] in the first 100 hours of the new Congress.” Why would she do this?

Even in wealthy Seattle, which passed a $15 minimum wage in 2014, independent researchers at the University of Washington revealed that entry-level jobs and hours worked fell as a direct consequence. As a result of reduced hours, entry-level wages actually fell by $1,500 a year, on average. A minimum wage increase that reduces wages? Just more proof that you can’t fight economics. If the $15 fallout was this bad in Seattle, think of the consequences to Main Street and entry-level employees in poorer cities such as Shreveport, Sioux Falls and South Bend.

Voting Democrat is voting against pro-growth economic policies. That isn’t to say that all Democrats are illiterate when it comes to economics. My point is that people like Ocasio-Cortez, Bernie Sanders, Elizabeth Warren and other progressive/socialist hardliners, where the energy in the Democratic Party is, hate pro-growth policies.

Hardline progressives/socialists see economics upside-down. They don’t get it that cutting taxes increases economic activity. These Democrats don’t understand that cutting regulations increases an entrepreneur’s incentive to start a new business. For that matter, only entrepreneurs notice that regulations prevent new businesses from starting.

This fall, the one thing I thought was missing was that Republicans didn’t make the case in specific enough terms of how voting for Democrats would hurt economic growth. This video is from 3 years ago:

The path to higher wages is through business-friendly policies. President Reagan, as he frequently did, put it best when he said that that you can’t pro-jobs and anti-employer. When President Obama raised corporate taxes, corporations left for other countries. In that instance, ‘fairness’ hurt American workers.

Why shouldn’t we learn that dramatically raising the minimum wage hurts everyone? Seattle’s increase to $15/hr. only increased automation while shrinking working hours. That’s rather counterproductive.

The Democrats’ economic blueprint is a blueprint for stagnation.

I agree with Townhall.com’s Katie Pavlich that the Democrats’ smear factory, aka the Senate Judiciary Committee’s Democrats, owe Associate Justice Brett M. Kavanaugh an apology. Unfortunately, that won’t happen. It won’t happen because too many of that Committee’s Democrats have presidential ambitions.

Pavlich is right in quoting the Committee’s report when it said “After an extensive investigation that included the thorough review of all potentially credible evidence submitted and interviews of more than 40 individuals with information relating to the allegations, including classmates and friends of all those involved, Committee investigators found no witness who could provide any verifiable evidence to support any of the allegations brought against Justice Kavanaugh. In other words, following the separate and extensive investigations by both the Committee and the FBI, there was no evidence to substantiate any of the claims of sexual assault made against Justice Kavanaugh.”

It isn’t difficult to predict that House Democrats will open another investigation into the FBI’s investigation of these charges. Jerry Nadler and Elijah Cummings can’t wait to start that investigation. Further, it isn’t difficult to predict that their investigations will produce tons more allegations but no corroborated testimony that verifies the women’s accusations.

It’s difficult to picture the House getting much done during the next 2 years. It isn’t difficult to picture them opening dozens of investigations into the Trump administration. I wouldn’t be surprised, though, if Pelosi insists on passing a corporate tax increase. Here’s why:

Don’t be surprised if House Democrats cause a recession in the next 16-20 months. When Pelosi was speaker the last time, she helped create a financial crisis. We didn’t get out of it until unified Republican government and President Trump’s leadership produced the current surge in economic growth.

This MPR article highlights what happens when politicians dabble in economics.

The article starts by interviewing a couple of business owners about the effect that the Trump/GOP tax cuts have had. Ultra Machining president Eric Gibson told MPR that he’s happy for the tax cuts, saying “From a business owner perspective, we’ve got a lot of great things going on right now. From a tax perspective, as an example, a lot of what we can reinvest in the business is from those tax reductions.”

At Yeager Machine in Norwood Young America, company president Mike Yeager said “I like what the Republicans and President Trump have done for me personally and my business. I will vote for people that support the current administration’s policies.”

Rather than listening to her constituents, Tina Smith thinks that she knows better, saying this:

“It doesn’t feel like a difficult position to me.” Smith said she would not have voted for the bill because it showers wealthy people with tax breaks at the expense of the middle class and will add more than a trillion dollars to the national debt.

“It’s not like that money was sitting in a bank somewhere waiting to be passed out. That’s money that we borrowed from our children and our grandchildren. I do not think that’s responsible.” Smith said increasing investment in workforce training and innovation would help more people get ahead.

How stupid is that? Tina Smith wants the government to “invest” our taxes in government workers because … government has such a great track record of “workforce training and innovation”? Let’s get a little serious. Then there’s this:

President Trump inherited a growing economy, and the tax cut has helped sustain the growth, said College of Saint Benedict and Saint John’s University economics professor Louis Johnston.

Technically, the economy was growing but it was the worst growth rate during a recovery in 75 years. The average annual growth rate during the Obama years was 1.9%. That’s pathetic. Since President Trump got rid of President Obama’s policies, the economy has been growing at a 4% average annual growth rate.

Republican Karin Housley (right) is a big fan of the Republican tax cut and is convinced that campaigning on it will help her win. Democrat Tina Smith said she’s not a fan because it showers wealthy people with tax breaks at the expense of the middle class. Mark Zdechlik | MPR News
Also, wages are rising during the Trump administration. They were stagnant during the Obama administration. Finally, small business confidence, which had been trending downward during President Obama’s second term, are skyrocketing under President Trump’s administration.

This is why leftists like Tina Smith and Prof. Johnston aren’t qualified to be economists.

This legislation stands in opposition to the Minnesota Constitution. The Minnesota Constitution proclaims that all political power is inherent in the people. It provides for the regular election of public officials in the legislative, executive, and judicial divisions. It is democratic and good that legislators and the governor are accountable to the people at the next election.This fall, the DFL has run ad after ad trying to scare people into not voting for Republicans because, allegedly, Republicans want to deny people with pre-existing conditions health insurance. In the DFL’s ads, they try frightening people into thinking that Republicans will deny people coverage, which is a lie. What’s frightening is the DFL’s Minnesota Health Plan.

The Minnesota Health Plan has a lengthy list of benefits, including “inpatient and outpatient health facility services; (2) inpatient and outpatient professional health care provider services; (3) diagnostic imaging, laboratory services, and other diagnostic and evaluative services; (4) medical equipment, appliances, and assistive technology, including prosthetics, eyeglasses, and hearing aids, their repair, technical support, and customization needed for individual use; (5) inpatient and outpatient rehabilitative care; (6) emergency care services; (7) emergency transportation; (8) necessary transportation for health care services for persons with disabilities or who may qualify as low income; (9) child and adult immunizations and preventive care; (10) health and wellness education; (11) hospice care; (12) care in a skilled nursing facility; (13) home health care including health care provided in an assisted living facility; (14) mental health services; (15) substance abuse treatment; (16) dental care; (17) vision care; (18) hearing care; (19) prescription drugs; (20) podiatric care; (21) chiropractic care; (22) acupuncture; (23) therapies which are shown by the National Institutes of Health National Center for Complementary and Integrative Health to be safe and effective; (24) blood and blood products; (25) dialysis; (26) adult day care; (27) rehabilitative and habilitative services; (28) ancillary health care or social services previously covered by Minnesota’s public
health programs; (29) case management and care coordination; (30) language interpretation and translation for health care services, including sign language and Braille or other services needed for individuals with communication barriers; and (31) those health care and long-term supportive services currently covered under Minnesota Statutes 2016, chapter 256B, for persons on medical assistance, including home and community-based waivered services under chapter 256B.”

Prof. John Spry wrote this article about the Minnesota Health Plan. FYI- Prof. Spry is considered by may to be the best tax economist in Minnesota. He’s served on tax reform boards in the past. Here’s what Prof. Spry wrote about the MHP:

Minnesota Democrats have a plan to create a statewide single-payer health plan funded with state taxes, without lawmakers voting for tax hikes. Minnesota Democrats’ legislation would give an appointed Minnesota Health Board the unlimited power to tax. This unelected board would run the entire health care system in Minnesota with both tax and spending authority. This unelected board would enact the massive tax hikes that Democratic legislators are unwilling to support publicly.

Article IV deals with the Plan’s funding. Here’s the language from the actual bill:

Subdivision 1. General provisions. (a) The board shall establish a Minnesota Health Fund to implement the Minnesota Health Plan and to receive premiums and other sources of revenue. The fund shall be administered by a director appointed by the Minnesota Health Board.
(b) All money collected, received, and transferred according to this chapter shall be deposited in the Minnesota Health Fund.
(c) Money deposited in the Minnesota Health Fund shall be used to finance the Minnesota Health Plan.
(d) All claims for health care services rendered shall be made to the Minnesota Health Fund.
(e) All payments made for health care services shall be disbursed from the Minnesota Health Fund.
(f) Premiums and other revenues collected each year must be sufficient to cover that year’s projected costs.

In other words, if the premiums and other revenues aren’t sufficient “to cover that year’s projected costs”, the unelected board has the authority to raise taxes to cover that year’s projected costs. According to this bill’s language, they don’t need to go to the legislature to raise taxes. This panel would have the authority to raise taxes on its own! Think about that a minute.

Prof. Spry then said this:

This legislation stands in opposition to the Minnesota Constitution. The Minnesota Constitution proclaims that all political power is inherent in the people. It provides for the regular election of public officials in the legislative, executive, and judicial divisions. It is democratic and good that legislators and the governor are accountable to the people at the next election.

More on this in Part II.

One of the things that Angie Craig criticizes Jason Lewis about is cutting the corporate tax rate. Like a good DFLer, John Croman wrote this article, saying “She said the historic tax overhaul signed into law by President Trump missed the mark. ‘I’m all for tax reform if it’s for middle class families and small businesses but Jason Lewis voted for a tax bill that put $2 trillion in additional debt on the backs of my children and was a tax giveaway to large corporations and the top one percent.'”

Let’s explain something to the mathematically- and economics-challenged, aka the DFL, especially Angie Craig. President Obama’s corporate tax hike triggered a mass exodus of US-based multinational corporations. Simply put, these multinational corporations left. While leftists like Angie Craig and President Obama flapped their gums about Warren Buffett’s secretary paying a higher tax rate than Buffett himself, companies left, causing economic growth to stagnate.

President Obama famously said that manufacturing jobs had left “and are never coming back”:

Jason Lewis helped pass the Republicans’ Tax Cuts & Jobs Act, which President Trump hastily signed right before Christmas, 2017. Suddenly, manufacturing jobs returned. The economy grew faster. Wages started rising.

Angie Craig sees what’s happening. Despite that, she wants to tear down the policies that’ve built the strongest economy in 50 years or more. People should ask Angie Craig why she’d want to wreck this high octane economy. I’d love hearing that answer.

Craig’s pat answer is to say that the best way to grow the economy is from the middle class outward. Obama said the same thing. The economy grew at a 1.9% rate per year during his administration. In 2 years under President Trump, the economy is growing at a 3+ percent clip. Consumer confidence and small business confidence are soaring like they never did under Obama.

If you want to return to the stagnant Obama economy, vote for Angie Craig. If you want to keep this high-octane Trump economy going, voting for Jason Lewis is imperative.

This NYTimes article highlights one of the major differences between a Republican majority in the upcoming House or a Democrat majority.

The article opens by saying “House Democrats will open an investigation into accusations of sexual misconduct and perjury against Judge Brett M. Kavanaugh if they win control of the House in November, Representative Jerrold Nadler, the New York Democrat in line to be the chairman of the Judiciary Committee, said on Friday. Speaking on the eve of Judge Kavanaugh’s confirmation vote this weekend, Mr. Nadler said that there was evidence that Senate Republicans and the F.B.I. had overseen a ‘whitewash’ investigation of the allegations and that the legitimacy of the Supreme Court was at stake. He sidestepped the issue of impeachment. ‘It is not something we are eager to do,’ Mr. Nadler said in an interview. ‘But the Senate having failed to do its proper constitutionally mandated job of advise and consent, we are going to have to do something to provide a check and balance, to protect the rule of law and to protect the legitimacy of one of our most important institutions.'”

Do we want a congress that’s focused on investigations all the time or on making people’s lives better by getting government out of the way? Put another way, do we want a revenge congress or a prosperity congress? Nadler has cast his vote. He’d prefer a revenge congress. No thanks.

This shows what the Democrats’ priorities are. Their priority isn’t the American people. Their priority is destroying President Trump. That’s because they hate the fact that President Trump is demolishing President Obama’s legacy. The American people don’t mind because there’s more money in their wallets than during the Obama administration.

This week, I wrote an LTE that was published in the St. Cloud Times. In the LTE, I wrote “During the Obama administration, economic growth averaged 1.5-2 percent annual growth. When Republicans criticized his policies, President Obama said economic growth of 4 percent was a “pipe dream.” Now that the economy is growing at 4 percent, Obama is campaigning, saying that this economic revival started during his administration. While the job growth is similar, there couldn’t be a bigger difference between administrations on small business investment, small business confidence, consumer confidence and durable goods orders and shipments. In each of those categories, the trend was heading down during the last term of the Obama administration but are skyrocketing during the Trump administration.”

In the comments, someone wrote this:

The whole debate over which president has the best record for the economy is ridiculous. The economy does its own thing without regard to White House occupant. Always has, always will. The most any presidential administration does is to nudge the direction the economy is going on its own.

President Trump and the GOP congress hasn’t nudged the economy to go in the direction it was already going in. Far from it. They ripped out the anti-growth policies of the Obama administration and implemented pro-growth policies like a major lowering of the corporate and individual tax rates. Since then, money that was hiding in Europe came flooding back into the US.

Congress employed the Congressional Review Act to rip out the anti-coal mining regulations that the Obama administration implemented in the final year of his administration. The US went from being a nation with a semi-dormant energy industry to being “energy dominant.” Do these things sound like gentle policy nudges? I don’t think so.

The Dow Jones Industrial Average has created over 100 new records since Trump was elected. Small business and consumer confidence were both trending downward on Election Day, 2016. Since then, both have started skyrocketing.

That didn’t happen just because of a change of administrations. It happened because of a dramatic shift in economic policies. Pretty much everything that the Obama administration did, the Trump administration ripped out. As a result, things are much better today than they were 2 years ago. In fact, it isn’t even close.

In fact, President Obama said that manufacturing jobs had left and that they weren’t ever coming back. According to this article, “according to today’s employment report from the Bureau of Labor Statistics, the sector has added 222,000 jobs, resuming a recovery that had paused in 2015 and 2016 amid strength in the dollar and weakness in the U.S. oil and gas industry.”