Minnesota’s rising unemployment rate pulled even with the national average for the first time in more than three decades. The jobless rate nationally and in Minnesota was 4.5 percent in February.
Wait a minute. This doesn’t make sense at all. Didn’t Tim Pawlenty just get our state out of the top ten in taxes? I thought this was the greatest accomplishment since the Minnesota Miracle (or maybe the Miracle on Ice?) Using his logic, shouldn’t our economy improve relative to the rest of the country now that our taxes aren’t holding back business?
I guess not.
You know why that isn’t happening?
Let me remind you of a few key facts.
- In 2003, for the first time in Minnesota history, we CUT money from the K-12 budget
- Over the last 6 years, tuition at public colleges and universities in Minnesota has skyrocketed
- As a result of a dramatic decrease in state funding to local governments (including schools) property taxes have increased some $1.7 billion since Tim Pawlenty took office
In light of this, why is ANYONE surprised that our economy has hit the skids. We are rapidly falling back into the pack. If this keeps up, pretty soon we will be ‘just a cold Omaha.’
Where were you last year when 10 percent of the country’s new jobs were created in Minnesota? I seem to remember about a year ago Democrats were criticizing Pawlenty because our job growth wasn’t keeping up with the national average. Now all of a sudden you want me to believe those were actually good times and that things are bad right now.
Sorry, but you have no credibility.
Politics in Minnesota raises a good point. Think we’ll hear about this again down the road?
MDE/PIM: http://www.minnesotademocratsexposed.com/2007/03/23/pim-when-the-dfl-party-does-attack-it-often-misses-the-mark/
Original Story: http://thehill.com/under-the-dome/coleman-fit-to-be-tied-at-senate-vote-2007-01-30.html
You know very well that the Republicans will blame the Jesse Ventura years for this. Was this all completely Jesse’s fault???
You missed the memo, Kathy.
It was _Rudy’s_ fault. If you look carefully, and cross your eyes a bit, you can trace all of MNs current woes to their proper origins 16 years ago.
Just wondering.
The governor sure is doing a great job:
http://christophertruscott.blogspot.com/2007/03/minnesotans-ready-for-progress-waiting.html
Oh and by the way, unemployment was over 5% when Pawlenty took office in 2003. It has dropped substantially since then even though it is up slightly now. During the Perpich administration, unemployment was over 8%. It is ignorant at best and deceitful at worst to say that our ecomony has hit the skids. By the way, Omaha is not a bad place to live. After all the world’s second wealthiest man, Warren Buffet - a limousine liberal - has made his home there for the past sixty odd years.
Did you take college economics?
Things take time. Tax cuts will take a certain amount of time to work into the economy. Just because you cut taxes doesn’t mean you create jobs immediately. Lower taxes allow businesses to flourish which EVENTUALLY allow the economy to grow and create more jobs…
They are connected, but it’s not an immediate cause and effect type thing.
So, if things take time - we can expect that in a few years we will finally realize the “trickle down” theories of Reaganomics? They will finally come to fruition?
Businsses will eventually flourish - how exactly does that mechanism work? It seems just a little too pat in the way this statement was made.
Paw Lenty (Steve Cannon, where are you?) has had quite a few years to make a mark - what shining thing has he delivered?
I know its spring & we should wonder how the grass turns green & we are informed by astrology - things are mysteriously connected…
Something a little more scientific should come out of a college econ class.
If tax cuts are so vital to economic health, why are low tax states like Mississippi consistently at the bottom of the heal in so many ratings?
By the way, Chris, when Perpich was Governor the Minnesota unemployment rate was lower than the national average. A drop from five percent to 4.5% isn’t “substantial” by any measure.
Let me remind you that your key facts are incorrect.
The net property tax burden is LOWER now than it was back when your DFL buddies relied on the general education levy in the mid to late ‘90’s, and the reason it is still lower is because of the $1 billion property tax cut the Legislature eancted in 2001. Sadly, the insatiable spending appetites of local government and school districts have nearly negated the benefit of that tax cut, and will continue to do so for a long time to come, despite the band-aid approach the DFL will take to property tax relief this session.
Education funding was held flat, not cut, in 2003. Regardless, your DFL buddies actually were the first to cut education funding, when they did so during a special session in 1981.
Randy,
We do not measure unemployment as to whether it is lower than the national average or not. When Perpich was governor, unemployment in Minnesota was over 8%. When Pawlenty took office, it was over 5%. Today, unemployment is lower than when Pawlenty took office, even if it is at the national average. The economy in Minnesota is good and it is intellectually dishonest to say that Pawlenty tanked the economy in Minnesota when unemployment is lower today than when he took office.
And by the way, not a single economist would say than any of the factors listed by Zack influence unemployment one way or the other. Certainly not residential property taxes and local government aid.
Having a high quality education system does influence the economy, but spending on education does not measure true education performance. The worst school district in the state spends over $13,000 per student.
Tell me, John Gordon, if low taxes invariably produce economic growth, why isn’t Haiti the powerhouse of the Western Hemisphere?
Think of it! No taxes, no schools filling kids heads with commie-pinko doctrines, no pesky environmental regulators - it must assuredly be an economic boom-town!
Except of course, its not. When you cut funding to those elements of societal infrastructure like schools, police forces, and hospitals, you destroy the societal wealth that you need for economic growth. And while its possible to set taxes so high they strangle growth, if they are too low the things needed for growth cannot be payed for.
There is so much to respond to here I don’t know where to start.
1) Chris, the whole point of this post is that the state has always performed better than the national average in terms of unemployment and now has fallen back into the pack. During the Perpich years, the unemployment rate may have been 8%, but the national rate was even higher.
2) The economy has hit the skids and everyone, even Republican Alan Greenspan, is saying so. Jobless numbers are rising and housing starts are slowing. Saying that the unemployment numbers were higher in the 80s does not prove the economy is fine today.
3) John, how long are we going to wait?
4) wtm. No, the net property tax burden isn’t lower. They may have offered 1 billion in property tax relief in 2001, but property taxes have risen 1.7 billion since then. Moreover, property taxes are projected to rise an additional 600 million next year, bringing the total rise since TPaw took office to 2.3 billion.
Zack,
I’m sorry but you’re just wrong that the economy has hit the skids. Unemployment is still historically low. It’s also lower today than it was when Pawlenty was elected Governor. I follow financial news everyday and do not recall seeing Alan Greenspan say that the economy has hit the skids. Had he said that, the stock market would have tanked.
What he did say is that there is a slight chance of a recession by the end of next year. The reasoning he gave was the number of consequtive quarters of growth and the fact that such growth cannot be sustained indefinitely. However, Greenspan also said that there are many factors that could prevent a recession from occurring — not the least of which is the signal from the Federal Reserve that they will not raise interest rates for the rest of the year.
Read any economic measure — from our $2 billion+ dollar surplus to historically low unemployment numbers — and nobody can honestly say that our economy has hit the skids.
“I follow financial news everyday and do not recall seeing Alan Greenspan say that the economy has hit the skids. Had he said that, the stock market would have tanked.” - Chris
Overseas, Greenspan did not use the term “skids” but did use the R word:
Former U.S. Federal Reserve Chairman Alan Greenspan warned Monday that the American economy might slip into recession by year’s end. - Source
As to that “tank”…
Judging from the markets, you’d hardly know Alan Greenspan has been gone from the Federal Reserve for more than a year. When he talks, Wall Street still listens.
Stocks tanked around the globe Tuesday as skittish investors fretted over the prospects of major economic slowdowns in the United States and China. Greenspan had warned a day earlier that the U.S. economy might slip into recession by year’s end. - Source
FYI: Greenspan’s comments occurred 2/26/07 with the market reaction on 2/27/07.
Also, I thanks for the info regarding the Press Release, I”ll look for it…also, thank you for your comments on the middle class. We’re now comparing apples to apples.
Unfortunately, to see whose argument is stronger, we would have to estimate the total economic effect of all those taxes in order to determine which policy is a better deal for the middle class. (Ex: if the gas tax results in better infrastructure, which results in better jobs or company performance, isn’t the investment worth it?)
I probably won’t have time for a full economic analysis for a few months: let us know of any other data you find.
Noah,
You’re picking a fight with the wrong person. The reason the stock market fell on 2/27 was because of a sharp tumble in the Chinese markets. On 2/27 stock market fell 3.29% to 12,216.24 — hardly a crash and not even technically a “correction.” Friday’s close was 12,481.01. If we were in a recession, Noah, the market would not be steadily increasing. Nice try though, Noah.
I honestly don’t understand why liberals have such a sour view on everything. What’s more, I don’t understand why people would listen to your doom and gloom when it’s been proven false over and over again.
Of all the new jobs created under the Pawlenty administration, how many are jobs that comfortably support a middle class family? What are the percentages of high paying jobs compared to low-income jobs? Does anyone have this information?
I’m no economist but common sense tells me that the economy won’t flourish if most of the jobs being created are low-income. Sorry if this is off subject but I think the pay scale of jobs factors into the economy just as much, if not more, than the unemployment rate.
We can’t pat someone on the back for lowering the unemployment rate and lowering taxes if families cannot make a livable income and we compromise our children’s futures by not adequately investing in their education.
Zack,
Again, the net property tax burden is still lower than when the DFL relied on the general education levy. If you don’t believe me, go look at the “net tax levy” line on the state share spreadsheet prepared by House Fiscal Research, which can be accessed here: http://www.house.leg.state.mn.us/fiscal/files/k12stpct.pdf
The net general education levy burden in the late ‘90’s reached a high water mark of $2.2 billion. When the property tax relief bill was enacted in 2001, the property tax burden was lowered to $900 million. Now, the net general education levy is still lower than the high water mark of a decade ago, at around $1.6 billion. The increase in property taxes, while occurring, is still less than it were a decade ago. Moreover, many levies were renewed in the 2001-02 period after the property tax relief bill was instituted under the pretense that the levies would be “free” to the taxpayers because of the relief bought down by the state.
The long and short of it is that at some point everyone’s going to have to look at the elephant in the room, which is the never-ending spending increases the school districts want. Any property tax “relief” bill passed this year will be a temporary fix and will not prevent property taxes from increasing because it does not address the core issue — spending.
One more reason to take unemployment numbers with a grain of salt. They measure people actively looking for jobs, not those who have not found them. Numerous dips in umenployment rates boths state- and nationwide in recent years have been traced largely to people giving up their search for a job.
Chris:
Not sure why you think I’m picking a fight with you since the only comments of my own were respectful and fair. If you want to fight over the causes of the Feb stock market slump/tank/whatever, your real fighting partner is MSNBC.
Noah,
I’m glad you’re backing down from your previous comment. It’s hard to maintain that the economy has tanked when you see that the 3% one day drop in the stock market has fully recovered. Also, I wouldn’t cite the lowest rated cable news network as a source.
Yeah, Chris, because ratings=accuracy. Remember that study a while back that demonstrated that those who watched Fox News were much more likely to be grossly mistaken about key facts surrounding the case to go to war with Iraq? Fox viewers were “three times more likely than the next nearest network to hold all three misperceptions. In the audience for NPR/PBS, however, there was an overwhelming majority who did not have any of the three misperceptions, and hardly any had all three.” But do keep us posted on how well things are going under the able stewardship of Bush and Pawlenty. I don’t get the time to read enough fiction when I’m sucked into the blogs…
Hey Teddy,
That study you cited has been largely debunked. If you surveyed NPR listeners, they would say we went into Iraq to steal their oil, rape their women and convert them to Christianity. As for MSNBC as a network, apparently they aren’t doing their job when people like you and Noah are so uninformed about the stock markets, economy and the leading economic indicators.