Archive for the ‘Economy’ Category

Last year, Rep. Paul Thissen’s partisanship paved the way for the legislature’s special session. Without his throwing a daily hissy fit about Republicans, the legislature wouldn’t have needed a special session to finish the biennial budget. Thanks to Rep. Thissen’s whining, there was a special session. Though this AP article doesn’t mention Rep. Thissen, it’s definitely got his fingerprints all over it.

For instance, the final paragraph of the article starts with “DFLers called the House bill partisan and said it elevated projects in Republican districts above others that were ranked higher priorities. They cited was Eastman Hall, which was ranked lower on the Minnesota State Colleges and Universities wish list than projects in Hibbing, Rochester, Winona and Bemidji, which are in DFL district and were not included in the bill.”

The truth is that the Senate DFL, not the House GOP, is to blame for the bonding bill logjam. The Senate DFL’s bill called for $1,800,000,000 of bonding. That’s $750,000,000 more than the biggest bonding bill in Minnesota history. Because the Senate DFL’s bonding bill was that expensive, Republicans couldn’t take it seriously.

Republicans couldn’t take it seriously because the DFL’s bonding bill keeps running up debt which requires high taxes:

Moody’s 2015 State Debt Median Report ranks Minnesota debt burden as moderately elevated compared to other states: Minnesota’s net tax-supported debt (NTD) per capita is $1,538 compared to the national median of $1,012; NTD as a percentage of personal income is 3.2% for Minnesota versus a national median of 2.5%; and NTD as a percentage of gross state domestic product of 2.69% is above the national median of 2.21%. However, Moody’s estimates Minnesota’s fiscal 2014 debt service ratio (net tax-supported debt as a percentage of operating fund revenues and pledged revenues) to be 4.2% versus a fiscal 2014 median of 5.3%. This ranks in the top (or most favorable) quartile of state rankings.

Rather than letting the private sector grow the economy, the DFL’s preferred path is to have the government borrow money to pay for what essentially is a sugar high economic bump. The DFL is incapable of thinking that the private sector doesn’t need help in growing the economy because the DFL thinks that the government has to be involved in everything.

Until the DFL stops thinking that the economy won’t grow if the government isn’t spending tons of money, Minnesota won’t have a strong private sector economy.

Dan Wolgamott’s op-ed in tomorrow’s St. Cloud Times isn’t a portrait in honesty. Then again, that isn’t my expectation from Wolgamott.

It isn’t that Wolgamott told some outright whoppers. It’s that he omitted the most important details from his op-ed. Wolgamott started by criticizing retiring Sen. John Pederson. In the interest of full disclosure, John represents me in the Minnesota Senate. I consider him to be a friend, too. But I digress.

The opening paragraph of Wolgamott’s op-ed says “Once again, Republican Sen. John Pederson has turned his back on our community. He cast the tie-breaking vote last week to defeat the Senate bonding bill, which would’ve created 39,000 jobs across the state and invested more than $24 million locally in job creation, veterans and making our area safer.”

Wolgamott’s missing integrity is exposed by the fact that Wolgamott didn’t mention the fact that the bonding bill that Sen. Pederson voted against was the biggest in Minnesota history at $1,800,000,000. That’s more than $750,000,000 bigger than the biggest bonding bill in state history. It’s bad enough to pass the biggest bonding bill in state history if it’s bigger by $100,000,000. It’s quite another to attempt to pass a bonding bill that’s almost twice the size of the biggest bonding bill in state history.

Then there’s this cheap shot:

Unfortunately, Pederson chose partisanship over progress and voted against $19 million for needed upgrades and safety measures for the St. Cloud correctional facility. He voted against $1.5 million in economic development money for Friedrich Regional Park in St. Cloud. He even said no to veterans, $3.5 million for the St. Cloud Armory.

Let’s turn the tables on Wolgamott. Is he saying that he wouldn’t have hesitated in voting for a bill that’s that big? Would he hesitate in voting for a bill that would tax the ‘state credit card’ to the max?

Those are examples of deception by omission. This is an example of outright BS:

As your next state senator, I will be a tireless advocate for our community, and the priorities we share, over partisan games and gridlock.

Last year, I wrote this post to highlight Wolgamott’s willingness to spend recklessly:

It’s time for us to invest in our roads and bridges, which is why St. Cloud needs better leadership than State Sen. John Pederson. As made clear in two recent articles in the St. Cloud Times, Pederson has some thoughts on the state’s transportation network. As the Republican lead on the Senate Transportation and Public Safety Committee, he could play a vital role in providing St. Cloud the comprehensive transportation investment we need.

Instead, Sen. Pederson backs a plan that not only shifts money away from our schools and services for our most vulnerable residents, but relies heavily on borrowing for our roads and bridges, putting the costs on the state’s credit card. This plan depends on action to be taken by future legislatures. However, there is no guarantee future legislatures will make those decisions. Instead of stability, this is another example of politicians promising something in the future to justify ducking their responsibilities now.

Back then, Wolgamott advocated for a middle class tax increase to pay for fixing Minnesota’s roads and bridges. That’s besides Wolgamott’s advocating for additional middle class tax increases to pay for transit projects.

To summarize Wolgamott’s limited history, he’s advocated for middle class tax increases to pay for fixing Minnesota’s roads and bridges. Wolgamott has advocated putting nearly $2,000,000,000 on Minnesota’s credit card rather than fixing Minnesota’s economic fundamentals. Those aren’t solutions. They’re gimmicks.

Finally, does Wolgamott really think that Sen. Pederson wouldn’t have voted for a responsible bonding bill that included fixing the St. Cloud Armory and the St. Cloud prison? If Mr. Wolgamott is peddling that BS, then he isn’t honest enough to represent St. Cloud in the State Senate.

After reading this DFL puff piece, it would difficult to prove that it wasn’t written by ABM’s spinmeisters and given to these Strib stenographers. (They aren’t reporters because they didn’t question any of the DFL’s statements.)

For instance, the title is intellectually dishonest. The Strib’s title is “There’s no evidence that ultra-rich are fleeing Minnesota.” Nobody said the ultra-rich would leave Minnesota. That’s because the ultra-rich have much of their wealth hidden from taxation. The Strib is wrong, too, when they said that “Critics predicted that the ultra-affluent would flee after Gov. Mark Dayton secured 2013 passage of a new income tax tier of 9.85 percent on individuals who make more than $156,000 a year.”

It’s insulting that the Strib reporters got this information that badly wrong. Republicans said that small businesses and entrepreneurs would leave the state. I wrote this article to highlight the brain drain that Minnesota is experiencing. While the article’s focus was on the number of Minnesotans leaving for Wisconsin and the Dakotas vs. the number of students moving into Minnesota from Wisconsin and the Dakotas, I also highlighted the amount of capital flight that’s happening and that accelerated following the Dayton/DFL tax increase of 2013.

That capital flight isn’t just a statistic. It’s something John Christianson has witnessed firsthand:

John Christianson, an accountant in Willmar, said he’s aware of 12 wealthy people in his community who moved away, and six who expanded their businesses in other states. “People are at least considering it,” he says. “Ten or fifteen years ago, it wasn’t as prevalent.”

It isn’t a secret that Minnesota is losing out on tons of income. According to Peter Nelson’s study, most of the people leaving Minnesota aren’t snowbirds heading to Florida or Arizona:

One might think that most high-earning families who leave Minnesota are retirees moving to Florida or Arizona but this is not the case. Working-age people between 35 and 54 account for nearly 40 percent of Minnesota’s net loss of tax filers for the 2013-2014 period.

Shouldn’t Minnesota insist on pro-growth economic policies that attract the best and the brightest rather than chase them away? At some point, the capital flight from Minnesota and the brain drain Minnesota is experiencing will catch up with us. This isn’t a bold prediction. It’s just simple math.

To hear the DFL tell it, you’d think that Wisconsin’s unemployment rate is high and that economic growth is virtually nonexistent. That’s just additional proof that the DFL isn’t hinged to the truth. This article demolishes the DFL’s arguments.

In the second paragraph in Collin Roth’s article, Roth states “The Wisconsin Department of Workforce Development (DWD) announced new economic numbers Thursday that reveal an improving economy in the Badger state. The unemployment rate is down to 4.5% and the state added a statistically significant 13,100 private sector jobs from February to March. 4,200 of those jobs were in manufacturing.”

Those aren’t the only positive statistics from the article that prove Gov. Walker’s policies are working. The article also states that “Wisconsin added 47,500 private sector jobs from March 2015 to March 2016, making it the best year-over-year growth since August 2004.”

It isn’t just that the unemployment rate is low. It isn’t just that lots of jobs are getting created. It’s that Wisconsin’s workforce participation rate is high. According to the Wisconsin Department of Workforce Development, “the labor force participation rate reached 68.8%, making it the sixth highest in the country and above the national rate of 63%. An estimated 3 million Wisconsinites are now in the workforce, an all-time high for the state.”

Finally, there’s this:

“Today’s report shows that Wisconsin’s employment was higher than ever in March, our unemployment rate dropped over the month while the national rate increased, and the state experienced the best 12 months of job growth since 2004,” DWD Secretary Allen said. “All indicators show that under Governor Walker’s leadership, Wisconsin’s economy is expanding and adding jobs in 2016.”

It’s possible to lie with statistics. Still, it’s difficult, if not impossible, to say that these economic statistics are deceptive. These statistics argue that Wisconsin’s economy is healthy, that Wisconsin’s economy is being built to last and that people are noticing the change since Gov. Walker straightened out Gov. Doyle’s mess.

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A little over a week ago, the St. Cloud Times published my LTE in which I talked about how Speaker Daudt challenged Rep. Thissen. Specifically, I wrote that Thissen accused Republicans of throwing “controversial provisions into big bills right at the end” of session. Unwilling to let Rep. Thissen’s spin go unchallenged, Speaker Daudt asked him to name some specific controversial provisions that Republicans threw into big budget bills at the end of the 2015 session.

Rather than respond substantively, Rep. Thissen repeated the accusation.

Later, I wrote that “Tim Kelly, the chairman of the House Transportation Committee, wrote an op-ed saying that the next transportation plan Thissen submits ‘will be his first.'” I also said that it’s “a disgrace that the DFL would pick a dishonest man to lead them in the House.” I finished by saying that the DFL agenda is “all criticism and no solutions.” I must’ve gotten under Rep. Thissen’s skin with that. Earlier this week, the Times published Rep. Thissen’s op-ed.

Rep. Thissen’s op-ed addresses some items from the DFL agenda. He started by saying that the “reality is we have been the party of ideas, bringing forth common-sense solutions to address Minnesota’s biggest problem — too many Minnesotans are being squeezed in an economy tilted in favor of the insiders, elites and special interests.” With all due respect, Rep. Thissen, the DFL is the party of special interests.

Nobody’s been squeezed more than the Iron Range. They’ve been squeezed by environmental absolutists who demand that mining projects can’t produce any pollution ever. They’ve been squeezed so tight that it’s difficult to find middle class families on the Range. Minnesota’s poverty rate is 11.5%; compare that with Hibbing’s poverty rate of 20.6% and Virginia’s poverty rate of 26.5%. Then, Rep. Thissen, tell me who’s getting squeezed and who’s getting ignored by the DFL.

Rep. Thissen also wrote that “House DFLers proposed just a solution comprised partly of the House GOP transportation plan and Gov. Mark Dayton’s proposal.” That isn’t a solution. The DFL’s ‘solution’ would’ve imposed a major tax increase on the very middle class taxpayers that Rep. Thissen insists are getting squeezed by the special interests. FYI- Gov. Dayton’s transportation plan is virtually identical to Move MN’s transportation plan. Move MN doesn’t exist anymore. The new DFL-aligned transportation lobbyist organization is called Transportation Forward.

Rep. Thissen, when the DFL approved spending on the Senate Office Building, which group of squeezed people did that help? When the DFL legislature passed its Tax Bill, it included sales taxes on farm equipment repairs, warehousing services and other B2B taxes. This table offers a good explanation of the middle class tax increases the DFL imposed on Minnesotans:

Rep. Thissen, why did the DFL legislature pass this mountain of middle class tax increases in 2013, then vote to repeal them in 2014?

It’s crazy that Rep. Thissen thinks that this is a solution:

We have introduced legislation that would demand powerful drug companies be more transparent about profits to reduce costs of prescription drugs.

That’s right, Rep. Thissen. Central Minnesota has been insisting that the state government get involved in telling businesses how they’ll be allowed to conduct business. Minnesotans are getting squeezed by busybody politicians like Rep. Thissen have heaped piles of compliance costs, reporting requirements and regulations on businesses. That, more than anything else, is what’s driving up costs.

Finally, what’s interesting is that Rep. Thissen didn’t argue that he wasn’t truthful about the controversial provisions thrown into bills.

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This SC Times editorial is frightening in its naiveté. When the Times says that “The IRRRB hasn’t properly overseen the use and impacts of its loans and grants”, that’s a polite way of saying the IRRRB’s loans haven’t created jobs like they were supposed to.

When I wrote this article, I was a little sad but mostly pissed as hell that these DFL politicians put political considerations ahead of creating jobs. It’s said that it’s possible to lie with statistics. That’s true sometimes. This isn’t one of those times, though. According to US Census Bureau statistics, Minnesota’s statewide poverty rate is 11.5% while its Median Household Income is $60,828.

Hibbing’s poverty take is an obscene 20.6%, which is respectable compared with Virginia’s poverty rate, which is a ghastly 26.5%. Hibbing’s MHI is $38,112. Virginia’s is $33,143. It’s easier to just state the truth. There isn’t a middle class on the Iron Range. Period.

Meanwhile, accountability is a 4-letter word in the IRRRB’s dictionary. The IRRRB was literally started before the Japanese bombed Pearl Harbor. The fact that the Iron Range’s poverty rate is double the statewide average and the fact that the Iron Range’s MHI is lower than in Appalachia shouts that the IRRRB has failed miserably. It doesn’t need a few reforms. It’s that somebody needs to bring a few sticks of dynamite and a slow-burning long fuse to IRRRB headquarters when nobody’s around, then light the fuse.

It’s a failure. Fixing it is a waste of time.

This article highlights another instance in which the DFL is trying to drive companies out of Minnesota. They shouldn’t be blamed, though. Democrats in Washington, DC, are attempting to drive companies out of the U.S.

Specifically, “Senate DFLers are pushing a more generous paid family leave than the three states that require it, mandating up to 12 weeks of paid time off for new parents or people caring for sick family members. That’s double what is required in New Jersey and California; Rhode Island offers eight weeks.” Additionally, the “fight is gaining attention at the national level as Democratic presidential candidates Hillary Clinton and Bernie Sanders have proposed leave policies.”

This is just another thing ton the DFL’s agenda that’s driving employment costs up for Minnesota businesses. (It isn’t like they aren’t already leaving for lower tax states.) The executive summary of Peter Nelson’s report doesn’t paint a positive picture for Minnesota.

This information is especially troubling to Minnesota’s long-term health:

Most of the taxpayers who leave Minnesota for lower-tax states are in their prime earning years. One might think that most high-earning families who leave Minnesota are retirees moving to Florida or Arizona, but this is not the case. Working-age people between 35 and 54 account for nearly 40 percent of Minnesota’s net loss of tax filers for the 2013-2014 period.

In other words, Minnesota isn’t losing people at the end of their prime earning years. If they were, they could recover from that fairly quickly. It’s more difficult to recover long-term income loss because you have to attract people who are entering or in their prime earning years.

Further factoring into this difficult situation is the fact that people in their prime earning years aren’t likely to be as loyal to Minnesota as someone in the last part of their prime earning years. Someone that’s 60 and still earning significant dollars likely has a family here. They’ve established their lifestyle and are comfortable with it. Their friends are likely here, too.

It’s understatement that government-mandated business costs don’t incentivize companies to stay loyal to Minnesota. Their first priority is to maximize their company’s profits, which contributes to their family’s security.

This says it all:

Doug Seaton said he believes that politicians have no business telling employers to offer paid family and medical leave.

When politicians start putting their capital at risk and start signing the front of the paycheck, they can choose to offer paid family and medical leave. Then there’s this:

“Politicians, most of whom have no experience signing paychecks for employees of any kind, are not in a good position to make these decisions,” Seaton said. “It restricts the ability of the business to tailor its benefits to all employees in a way that makes sense.” He added that it came on top of “what employers already perceive as a very extensive and expansive set of entitlements in Minnesota.”

That’s a polite way of telling politicians to stop imposing their will on companies that they don’t own. It’s a polite way of telling politicians to shut up.

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Jim Tankersley’s article doesn’t pull its punches. According to an economic model prepared by Moody’s Analytics shows that a Trump trade war would hurt China and Mexico but that “4 million American workers would lose their jobs. Another 3 million jobs would not be created that otherwise would have been, had the country not fallen into a trade-induced downturn.”

First, I won’t tell people that the trade deals that the U.S. has negotiated recently are good deals. I won’t hesitate, though, in telling people that the difference between negotiating great trade deals and negotiating mediocre trade deals isn’t as important as fixing the economic mess that the Obama administration has created.

Fixing the Obama administration’s mess requires eliminating most of the administration’s nastiest regulations, starting with Obamacare. It’s also important that the administration’s war on fossil fuels be stopped ASAP. Most manufacturing jobs require cheap energy. That eliminates the energy that comes from solar panels and wind farms.

To rebuild our national manufacturing economy, we need a capital gains tax cut. In 1980, the federal government “approved nearly $1.5 billion in loan guarantees.” Ford, Chevy and Chrysler were hurting. People were talking about their best days being behind them. Then Reagan took over. He started with implementing a major capital gains tax cut, which helped modernize Ford, Chevy and Chrysler. Talk about Japan replacing the United States as car manufacturing superpower quickly disappeared.

Obamacare and Obama’s tax increase on small businesses drove businesses out of the United States. Trump might be a good negotiator but he definitely isn’t smart at policymaking. His policy prescriptions won’t make America great again. They might make America ok again but they won’t make it great.

When it comes to mining, the Mesabi Daily News doesn’t pull its punches. Their editor, Bill Hanna, hasn’t hesitated in calling Democrats or Republicans out if they’ve stepped out of line with the mining industry. In this editorial, the Mesabi Daily News didn’t pull its punches with Gov. Dayton, starting with them saying “Gov. Mark Dayton reached out to the Iron Range in an editorial page guest column last week and tried to defend the indefensible — his decision to not allow the Department of Natural Resources to enter into any Access Agreements for mining operations on state lands.”

Follow this link to read Gov. Dayton’s op-ed. Rather than siding with mining, Gov. Dayton’s defense hit the Range with another gut punch. The Mesabi Daily News wrote “The governor gets another F-minus in his explanation and attempted justification of that decision, which also graded out as an F-minus when it was announced on March 7.”

While they didn’t quote Gov. Dayton’s op-ed, I’m fairly certain that MDN is upset with Gov. Dayton’s statement that “I believe the best approach is to respect the invisible, but very real, boundary that was established almost 40 years ago, which permits mining activities within the existing industrial footprints on the Iron Range, and prevents them within or adjacent to the Boundary Waters. People who can accept that division will be able to at least co-exist, if not actually cooperate.”

Here’s what MDN thought of Gov. Dayton’s statement:

Here’s what the governor’s declaration by fiat basically said:

  1. NO to Twin Metals Minnesota, we don’t want you. But we do thank you for the $400 million you’ve invested already in our state. The greenbacks are appreciated.
  2. NO to mineral exploration on state lands, even through the state Executive Council approved the leases.
  3. NO, I don’t trust my own Department of Natural Resources to thoroughly do its job of due diligence and review of Twin Metals’ proposals.
  4. NO to scientific-based environmental review process of copper/nickel/precious metals mining. That would make too much common sense.
  5. NO to citizen participation. The extremist preservationist groups and their supporters, many of them from the Twin Cities area or out of state, know what’s best. They are my kitchen cabinet on this issue.

Rather than calling these environmental extremist groups part of Gov. Dayton’s “kitchen cabinet,” I think it’s more accurate to call them part of his Board of Oligarchs. Here’s the definition for the word oligarchy:

a form of government in which all power is vested in a few persons or in a dominant class or clique; government by the few.

He’s represented the environmental activists who fund the DFL’s campaigns. It’s indisputable that a significant portion of the DFL wants mining shut down regardless of what the facts say. I’ve written about Conservation Minnesota’s Mining Truth website more times than I’d prefer to. I’ve repeatedly highlighted the distortions published by CM through MT. Those organizations should be part of Minnesota’s Hall of Shame in terms of disinformation.

I’ll close with MDN’s closing paragraph because they’ve stated it perfectly:

On second thought, we grade it F-minus-minus.

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According to this article, Sen. Bakk has put together reform legislation that eliminates legislators as official final decision makers on IRRRB appropriations. If Sen. Bakk’s legislation passes (it isn’t submitted yet), it ” will return the board to an advisory role to the governor and remedy concerns raised in the Legislative Auditor’s report.” That would eliminate the OLA’s constitutional concerns.

It wouldn’t eliminate the Iron Range delegation as ‘advisors’ to the IRRRB, which is the IRRRB’s biggest problem.

Sen. Bakk is spinning things by saying that “the language change will address that issue because the board will then be advisory, which would mean board members/legislators would not have the final say in decisions.” From a constitutional standpoint, that’s fine but it doesn’t address the overarching problem.

The Iron Range delegation are the overarching problem. Over the past 20 years, the Iron Range delegation voted for legislation, sponsored by Rep. Tom Rukavina, that “allowed the board to bypass the governor.” Rep. Rukavina retired in 2012. The IRRRB should be mothballed ASAP, too.

It’s indisputable that some of the projects that the IRRRB funded have produced positive results. Still, that isn’t saying that they’ve done a good job. The IRRRB hasn’t. I wrote here about how the Iron Range doesn’t really have a middle class. According to the IRRRB’s website, the “IRRRB’s mission is to promote and invest in business, community and workforce development for the betterment of northeastern Minnesota.” Based on their own website, they’ve failed miserably.

Fixing the IRRRB’s constitutional issues is the least of the IRRRB’s problems. With 20.6% of the people in Hibbing and 26.5% of the people in Virginia living below the Federal Poverty Level, aka FPL, it’s difficult to argue that the IRRRB has worked “for the betterment of northeast Minnesota.” In fact, I’d argue that it isn’t difficult to argue that the IRRRB hasn’t come close to strengthening northeastern Minnesota’s economy.

Einstein’s definition of insanity is doing the same thing again and again and expecting different results. It’s foolish to think that the Iron Range delegation will do something constructive as ‘advisors’ when they didn’t do anything constructive when they had final say on spending.